Gold grew the most in a decade last year and its price will rise even more

Gold grew the most in a decade last year and its price will rise even more

In 2020, the price of gold recorded the sharpest annual increase in a decade. Gold has been strengthening for two years now, by about 20% in 2019 and by as much as a quarter in 2020. Last year, gold was supported by extremely low interest rates and unprecedented monetary stimulus in the fight against the consequences of the new coronavirus pandemic. Most experts expect that the price of gold will continue to rise in 2021, and some analysts expect new records. The spot price of gold rose 0.2% on Thursday (December 31) to close at $ 1,898.36 (€ 1,547.03) per ounce (31.1 grams). In December, gold strengthened by 6.8% and for the whole of 2020 by 25%. This was the sharpest increase in its price since 2010. Other precious metals also improved significantly last year. The spot price of silver jumped by 48%, the price of palladium by 26% and platinum by 11%. Commerzbank analysts predict that the price of gold could reach $ 2,100 an ounce by the end of 2021. That would break the record of summer 2020, when the price reached 2075 USD per ounce. Experts generally predict that gold will continue to grow. Most of the analysts interviewed by Bloomberg anticipate that it will be higher at the end of 2021 than at the beginning. In most cases, however, they expect only a slight increase, somewhere to around 1900 USD per ounce. The price of gold will continue to be supported by the extremely loose monetary policies of major central banks. Even if the corona crisis could be brought under control during 2021 thanks to effective vaccines, the monetary policies of central banks will remain extremely loose for a long time to come and the debts of industrialized countries will be high. "Despite the vaccination, we do not expect a change in ultra-expansionary monetary and fiscal policy," said Commerzbank commodity expert Carsten Fritsch. In addition, investors have to reckon with the fact that central banks will continue the policy of zero interest rates for many years to come. Therefore, non-interest-bearing gold should remain a relatively lucrative investment alternative. Especially since many economists expect inflation to return in 2021. And gold is seen as a hedge against inflation. In addition, according to experts, central banks could also increase their purchases of gold. Last year, after two years of extremely high purchases, their interest cooled significantly.