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3 Reasons Why Gold Price Is Increasing in 2021

It wasn’t easy being a gold investor in 2020. The precious metal had its ups and downs, and during the coronavirus pandemic, it managed to hit an all-time low. The reason was the selloff that occurred when the pandemic was at its peak. Things changed swiftly in this market, and the end of the last year and the beginning of this one signaled gold resurrection. This commodity managed to bounce off in an unprecedented manner because it reached an all-time high of its value in recent times. So, if you were wise enough not to sell any of it when the times became troublesome, you did a fabulous job. The gold is now worth more than ever before. But this pops up the question, will it keep on growing in 2021? We believe it will, and in this article, we are going to give you the three reasons why the gold price is increasing in 2021. But, before jumping into the future, and our predictions for this precious metal, let’s see what happened to it during 2020.

2020 – The Year in Gold

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The golden momentum that started in 2019 continued through the first couple of weeks of the following year, and the future looked bright. The geopolitical conflicts all over the world were on the rise, but this didn’t affect the pierce, as it stood its ground at $1,520 an ounce and was still trending positive. It became the safest option to won gold as the tensions between Iran and the US escalated, and for some, the third world war was on the way.

But, all of the threats turned out to be empty ones, and as all war tensions disappeared, the investors started looking for investments elsewhere, turning their back on gold once more. The main reason why they turned the clock back was the rapid spread of the new virus. But, as it turned out, the virus was here to stay, and it once again became evident that the safest investment is this metal. All of those who went away came back running. Gold was once again a hot commodity.

Coronavirus managed to hit hard, or layers of society, and their assets, and gold wasn’t immune. The price tumbled down to $1,450, which was considered low at the time. While people believed that the fall was permanent, they were quickly proven wrong. As soon as it fell, it has risen rapidly and came back even more potent, reaching levels it didn’t in years prior. The drop came mid-year, but by August, it was once again strong, lingering at $2.075 per ounce, but the end of the summer meant it wouldn’t be going further up, at least for some time. But, despite this, one thing was exact, the gold still had its momentum, which could have been tracked all the way back to 2018.

So, What Awaits us in 2021?

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We can’t be confident speaking about this. Still, if we follow a couple of significant factors, we can predict the reality which will unravel itself in the coming months regarding gold value. The high value of gold is always a good thing, as it is a proven commodity that prevents inflation. The gold will rise if the cost of living goes up. These two things always go together. But, in 2020, inflation wasn’t going wild. It was stable, and this was reflected in the price of the gold.

The US Federal Reserve also had a saying in the matter, stating that inflation was so steady that it didn’t bother them even a little. But, various analytics and experts of the market are concerned that inflation awaits us in the future and that because of this, the gold is to be followed as an investment asset. So, one of the reasons why gold will go up in the coming months is inflation.

The second one is stock prices. They’re one of the primary factors that will affect the price of gold in the year ahead of us. The cost of gold is often seen through the prism of stock indices and equity evaluations. It’s all up to the numerous investors. If they see it as the right move to pick the gold over some other stocks, many people will see it, and they turn their heads the same way. It’s not like it hasn’t happened before. By the start of the year, we can already say many of them are already looking at gold as a hot commodity. If you want to know more about gold right now, you can always visit this site.

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After inflation and stock value and investments, we have another primary reason why the cost of gold will go up during the following year. Of course, as you probably could have guessed, it is the US dollar. The American dollar was always the primary factor in determining the value of this precious metal. The relationship between the two can even be considered even as a historic one at this moment. When the $ is high, the gold is not; when it’s low, the gold goes the other way.

As you probably know, if you follow US politics, the Federal Reserve is going to be one of the priorities of the next administrations. Joe Biden already stated this on more than one occasion. The reason is, of course, is that dollar is trending towards a historic low. The ruler of the United States changed after the most recent elections, but it will be hard to put their economy on its feet once again and even harder to push the dollar higher up. While stability can be expected in the years ahead, it is not realistic to see it this year.

Conclusion

As you can see, the price of gold is going up in the following year. The statistics and signs are all there. All that is left is for you to make the gold your primary investment. Follow the market, and make the right decisions. It will pay off if that decision is gold.

About Suzan Vega

Suzan Vega

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