Gold and precious metals in the spotlight: 2020 Recap

It was a flagship year for the yellow metal, hitting a new record high of $ 2,070 an ounce in August, as investors sought a reliable source of value against non-cash printing. never seen before.

The price of gold has now ended the year up in 17 of the last 20 years, for an impressive 85% gain rate.

Below you can see the dramatic increase in money supply, which helped fuel the rally in gold as well as other commodities. The amount of M1 money that has circulated around the U.S. economy has risen a staggering 66% from just last year. This is well ahead of the long-term average growth rate of around 6%. (M1, at least, includes the most liquid forms of money such as bills, coins, demand deposits, etc.)

January

Gold trades up to a seven-year high on rising tensions between the U.S. and Iran, following the killing of Iran’s top military commander. At the same time, palladium prices – already at record highs – are up 25% in as little as two weeks on global supply shortages.

February

The novel coronavirus was first discovered in China on December 31, 2019, but global markets will not begin to seriously address the potential consequences until February. Gold climbs above $ 1,600 an ounce on kiln demand and as a result of 10-year Treasury plummets. The Monetary Institute is urging investors to remain net buyers of silver and other precious metals – a good call, as cash grew by nearly 48% by the end of the year.

March

Gold prices jump above $ 1,700 and American Silver Eagle coins sell as the S&P 500 falls into bear area and the Federal Reserve reduces interest rates to near zero. Palladium and platinum both rise high in South Africa, one of the world’s leading producers of precious metals.

April

President Donald Trump signs $ 2.2 trillion relief package. Central banks in a Group of Seven countries are reported to be buying about $ 1.4 trillion in financial assets. Assets under management (AUM) in global gold-backed ETFs are reaching a new high. Many analysts, myself included, predict higher asset prices on unprecedented cash printing. I also see strong earnings for precious metal ores in the first quarter, a forecast that turns out to be accurate.

May

The yield on the two-year Treasury falls to the lowest level as the feedstocks enter market prices in negative interest rates by 2021, supporting precious metals. The three major royalty gold companies – Wheaton Precious Metals, Franco-Nevada and Royal Gold – have made the first quarter, reporting a combined $ 402 million in free cash flow.

June

Precious metals are the best hard assets they made in the first half of 2020, with gold up more than 17%, silver up 2%. The Fed announces that it will begin purchasing individual corporate bonds in addition to the corporate debt ETFs it has already begun purchasing. As a result of all these purchases, the central bank’s balance sheet exceeds $ 7 trillion, representing nearly a third of the U.S. economy.

July

Gold is starting to look late, with the 14-day relative strength index (RSI) above 97.5, the highest reading since September 1999. Seven-year high silver prices have hit both demand. the path and future bet on huge global demand from renewable energy. department. July, of course, marks the best month ever for money, going up 34%.

August

Gold hits record high of nearly $ 2,070 as gold-backed ETFs report holding more bullion than any country other than the US The yellow metal corrects to tidy. Royal companies report another position in the second quarter, with Wheaton Precious reporting revenues in excess of $ 503 million in the first half of the year. In a spectacular turn of events, Berkshire Hathaway, Warren Buffett’s gold skeptic, buys shares of Barrick Gold, the world’s second-largest producer of the precious metal. At the same time, I am predicting $ 4,000 gold in the next three years.

September

The yellow metal corrects, affecting the worst week since March. Taking advantage of lower prices, investors are adding 1.2 million ounces to gold-backed ETFs in a single day, mostly in 2020. Wheaton Precious CEO Randy Smallwood says gold is money in current “golden times” with large sums of helicopter money. support prices.

October

ETFs backed corporate gold climbed to a new level of 111.05 million ounces, after recording its 10th straight month of inflows. For the first time ever, such currencies will attract more than 1,000 tons of gold at this rate in one year, equivalent to $ 55.7 billion. My friend Pierre Lassonde, co-founder of Franco-Nevada, says “gold miners have never been so good,” explaining that the edges they emit are the fattest, best, and the amazing edges they’ve ever had. ”

November

Gold mining machines have evolved into cash flow machines. Royal gold companies, including Franco and Royal Gold, reported higher revenue in the third quarter, with Franco reporting nearly $ 280 million and Royal Gold reporting $ 147 million. Gold bullion is suffering its biggest one-day drop in more than seven years, falling 5%, after Pfizer announced it has developed an effective vaccine against COVID-19.

December

Silver stands as the best commodity of the year, up 48%, while gold represents the best year since 2010, up 25%. As for the other precious metals, palladium ends the year up 26%, platinum 11%. On December 25, total holdings of the Fed and European Central Bank (ECB) stand at $ 16 trillion, with Evercore ISI predicting this amount to rise to $ 18 trillion by the end of 2021. President Trump signs package for $ 900 billion extra in COVID relief.

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