Analysts at the Canadian bank TD Securities believe that the US presidential election is the main fear of this autumn. In their opinion, after the formation of the new US government, a prolonged price rally should begin in the gold market.
Today, there is pre-election chaos in the country where two parties are fighting for the leadership and for votes. However, after the elections, the situation will calm down, and the price of gold may begin to rise, reaching $2,100 per ounce.
Silver prices, in turn, are doing well. This always happens when conditions are favorable for gold. However, silver looks undervalued, analysts say. In the future, the production of electric vehicles and the refuse of hydrocarbons will allow silver to rise as it is used in all electronic circuits. Given the limited supply of precious metals on the market, there should be pressure on the existing supply, which in turn could allow silver to return to $30 per ounce in the next 2021.
Experts believe that by the end of 2020 the price of gold will depend mainly on investor sentiments.
Now the main topic for discussion is the presidential election in the United States and the coronavirus pandemic. Many central banks are confident that the gold market will continue to rise. But who knows.
In the middle of this year, gold has reached historic highs. Due to the global quarantine, many currencies have been in danger, and investors have resorted to gold. September showed a period of price correction, which is generally believed to be gradually declining, allowing the precious metals market to recover. However, the second wave of COVID-19 and the rise in the number of new infected people made investors interested in gold again.
Gold is currently trading at $1,900 per ounce. Experts are closely watching new information about COVID-19 and the US elections to be held on November 3. The election results are included in the gold forecasts.
ANZ Bank analysts suggest that in 2021 the price of gold will rise to $2,300 per ounce. Despite the critical situation around the world caused by COVID-19, the prospects for gold are quite positive. Especially the fact of postponing the financial aid package in the US has had a positive effect on gold prices. Also, central banks maintain a soft monetary policy, which will support gold.
Nevertheless, uncertainty is putting pressure on demand for gold. Therefore, despite the price rise of the precious metals, investments in gold are now associated with a number of risks.
However, the experts were divided. Some of them expect a decline in the price of gold in the near future.
Experts at J.P. Morgan say gold will rise by 5% if Joe Biden becomes the US President. If not, then gold will depreciate by 5%.
Analysts of the Swiss bank Credit Suisse, on the contrary, claim that the sideways movement of the precious metal price will continue. We can talk about the growth of gold after overcoming the level of $1,993 per ounce. But this may happen only next year.
The development of a vaccine against coronavirus in the United States or in Europe can turn prices in the opposite direction. As a result, investors will start selling precious metals, deceived by the illusion of a quick exit from the economic crisis. The second reason for the fall in prices can naturally be the results of the presidential election in the United States.
It is still difficult to predict exactly the price dynamics, since the price of gold has already increased by 22% since the beginning of the year, while silver has doubled in price.
The gold market is facing difficult times. But if it is possible to overcome the mark of $2,000, then growth is quite possible as well.
Other experts are pessimistic. In the remaining months of this year, there will be another economic downturn amid the second wave of coronavirus pandemic, which will lead to a depreciation of commodity assets, including gold.
For example, during the crisis in mortgage lending in the United States, gold fell by 30% in the shortest possible time.
Today, gold has the highest liquidity among all other assets. Thanks to this precious metal, investors not only kept their savings, but also increased them. According to experts from the World Gold Council, the demand for precious metals among investors will be the main factor determining the dynamics of the physical gold price.
