gold, page-85997

Whilst the gold price right now is bursting, I think another push to $2k in on the cards when the US eventually agree on a new stimulus which will need to be sooner rather than later, despite the election being in November, more money being printed just means greater value for gold and with interest rates expected to remain low until 2023, I expect gold prices to bounce around the $1.8 - $2.2k mark for quite some time. I also wouldn't be surprised to see a 3rd US stimulus package rolled out in 2021 as a result of the covid crisis, should there not be a vaccine as unemployment will remain high. Whether a 3rd large stimulus should be released is a topic I won't drag into this forum to keep politics out of discussion (as much as possible considering gold prices are heavily influence by politics). What I also find interesting is that Buffet has also moved into gold, which suggests to me that he is considering long term gold values to be positively influenced by this pandemic induced global recession, always a silver lining hey? Keep in mind, this man bagged gold most his life!

If we were to base the price of gold off of post GFC recovery, the value of gold greatly appreciated up to near $1.9k and stayed at these levels for some time until world economies fully recouped, where the price of gold fell off as gold was not valued as highly. I suspect that we have greater levels to rise, however, we have had a large bull run which requires a pull back before another bounce upon stimulus news. In 2021 when the full extent of the pandemic has been realised and soaked in, I wouldn't be surprised to see the price of gold go up to $2.5k or even $3k over time due to the excessive quantitative easing and low interest rates expected to remain for some time. I have also put a graph for interest rates below, as you can see around 2001 when the interest rates started to drop, the price of gold increased over time up until 2007-2009 where it stabilised and dipped before interest rates once again dropped massively and lead to a huge run in gold prices until economies were running strongly again and slowly increasing interest rates, where gold has dipped in value. We also need to factor in that this recession is very different to the GFC, we have major quantitative easing and no further to drop the interest rates, unemployment is also expected to remain high for quite some time. The GFC was hard hitting, but COVID takes the cake, commodities will benefit greatly from this recession, be it gold, silver or iron, as construction, mining and the like are expected to get some heavy stimulus to recover economies, hence, the high values for gold and iron (will not comment on silver as I do not follow the silver prices closely).