CPM Group Sees Less Chance for 2020 Gold Market Boom to Repeat This Year

SEATTLE (Scrap Monster): New York-based commodities research firm CPM Group announced that gold price gains are expected to remain more subdued in 2021, relative to last year.

The newly released market report by the CPM Group states that one cannot expect the phenomenal rally seen during the height of the pandemic during the current year. The 2020 gold market boom is unlikely to repeat this year, said the report. It must be noted that the bullion prices had surged by almost 40% from February to August last year. The year also reported record inflows into gold-backed exchange traded funds (ETFs).

According to the report, the global investment demand, which had totaled 44.5 million ounce in 2020, is likely to fall to 42.8 million this year. The investment demand will continue to be the key for elevated gold prices. Unlike last year, which saw investors chasing rising gold prices, purchases are likely to be confined to price drops.

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The central banks around the world are likely to add approximately 7 million ounces of gold to its holdings during this year, which is more or less similar to additions witnessed in 2020. The banks, especially in developing countries will continue adding gold, as part of their ongoing effort to diversify their assets away from the U.S. dollar and Euro, said CPM’s latest report.