We expect the same drivers that propelled gold in 2020 to continue in 2021. Later in the year, the world will become a very different place once the U.S. and other nations achieve herd immunity. Here we try to identify the remaining risks that might drive gold once the virus has been tamed:
- Negative Rates & Asset Bubbles—Foremost is the risk from the distorting influence negative nominal rates, negative real rates and zero rate policies have on the markets.
- Debt—A second risk is the huge debt load carried by governments and corporations.
- New Administration—Expected policies of the incoming Biden Administration are a third risk. Campaign promises
- Inflation—Inflation is another risk that may take many investors by surprise.
- Weakening U.S. Dollar—The DXY fell 6.8% in 2020.
MVIS Global Junior Gold Miners Index vs. Gold Price
12/31/2019-12/31/2020
