GOLD EXPECTED TO BREAK THE US$1950 BARRIER IN Q2 2021

The US Federal Government is expected to introduce yield curve control measures in September to support prices through the first half of 2021.

The head of Natixis Precious Metals research has increased his price forecast for Gold, indicating that the Gold price is expected to reach $1,950 an ounce by the second quarter of 2021. The general feeling among analysts is, that in the current environment, Gold gains are expected to be limited as inflation pressures remain muted. The yield curve control, coupled with the inflation, would push real interest rates into negative territory, making Gold an attractive safe-haven asset, the head of Natixis research believes.

The main danger without yield curve control, is that forward looking financial markets sometimes prematurely discount a recovery thus leading to a risk-in management swing, lifting borrowing rates for the Treasury and some private companies. The head of research also added that because of the economic impact of the Covid 19 pandemic, the Global economy will remain in a fragile state for a longer than expected period.

At the end of the day, we are all in territory that none of us have been before and every expert and analysts are making predictions based on their own “best guess”. The degree of supposition of what may be the final outcome is wider than ever and the views swing wildly in all 360 deg directions.

There is one thing that is for sure. At the current Gold price investing in a Gold producing mining company (that is well run by experienced operators) is without a doubt the worlds best investment, second only to the Company that produces the worlds first Covid 19 vaccine.

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