Oh, 2020… How we will miss ye’… Or will we? It probably depends who you ask. For many gold investors looking strictly through the lens of precious metals, 2020 has been a good year. Gold prices started 2020 around $1,600 per ounce — significantly above the $1,365 with which they kicked off January 2019, to be sure. But the $1,600 mark of January 2020 looks like a relative bargain as compared to the gold prices over the summer, which approached $2,100 in August.
Yes, gold backed off over the last quarter of 2020 and now stands at around $1,870 per ounce, but the net result of the year has been positive for gold investors: 2020 brought gains. Of course, casting 2020 as a “good” year seems callous and, frankly, tone deaf — especially considering the path of devastation COVID-19 left behind, the lives lost, torn families, long-term health complications many of the afflicted may face.
Considering the economic impacts of the pandemic, it’s not difficult to see why gold closes out 2020 on a positive trend over last year. Hundreds of thousands of businesses have been ruined or fiscally compromised, millions remain unemployed, countless careers have been sidelined and personal lives spiral into economic tailspin. It’s no wonder gold has performed as it has… When times are uncertain, gold and other precious-metal assets seem like safe havens for investors.
Perhaps it’s best to look at the events of this year in the holistic context… Yes, gold ends 2020 significantly higher than at this time a year ago, but not because the economy is booming and industrial demand for gold is through the roof, but because many people are scared. And they’re looking to an old, reliable friend at times that are new and uncertain.
All signs point to better times ahead in 2021… A vaccine is being unrolled to millions as this article is being written, the stock market is perking up, and a new type of technology-dependent economy is building in a way that perhaps wasn’t expected for at least another decade. If gold prices continue upward in 2021, maybe it won’t be due to crashes on Wall Street or the deaths of thousands on a daily basis from an essentially invisible virus. No… Maybe it will because we will have begun the great socioeconomic reset, becoming healthier, stronger, wiser than we were in 2020. More resilient, more knowledgeable, more prepared…
The future can’t be predicted, but one can speculate to their heart’s desire. And the future of gold in 2021 can be as bright as our imaginations want it to be. As the American — the world’s — economic engine fires back up while COVID-19 dissipates via vaccine into the history books, growth in industry and technology, two major sectors reliant on gold, could easily outpace gold mining and refining capacities. In turn, that scenario could promise golden horizons for precious-metals investors right through the next year and beyond.
May your new year be healthy and prosperous… Happy 2021!