SEATTLE (Scrap Monster): Leading UK-based research firm Metals Focus forecasts tempered outlook for gold during the current year, mainly due to ongoing uncertainties related to Covid-19 pandemic. The Gold Focus Report 2021 published yesterday says that the yellow metal is unlikely to witness the same type of euphoria that drove its prices to record highs in 2020.
According to the report, the gold prices are expected to average around $1,820 per ounce this year, slightly higher by 3% from the previous year. It must be noted that the prices had rallied nearly 27% in 2020.
The gold market will be dominated by two major factors- interest rates and inflation. Further unlikely cuts in policy rates and nominal yields will result in lesser inflows into gold this year, as compared with 2020. In the midst of accommodative monetary policies, gold is likely to see more appeal as an inflation hedge. Meantime, Gold Focus report predicts broad-based pickup in physical gold demand during the year.
It expects gold’s physical surplus to witness significant drop. The projected weakness in scrap supply will be offset by record high mine supply in 2021. Also, jewellery fabrication is projected to rise by one-third, said Neil Meader, Director, Metals Focus.