Source: The silver mountain
We can look back on an extremely turbulent year with a lot of turbulence and setbacks, but in terms of gold and silver we can speak of a good year. Both gold and silver have reached their highest level in four years. Last August, the price of gold was even above $ 2,000 an ounce.
In the past year, the demand for gold has skyrocketed. The COVID-19 pandemic brought a lot of fear and so people were looking for ways to protect themselves. They found this safe haven in physical metal, among other things. Gold sales rose massively in 2020. The US Mint sold 884,000 ounces of gold in various denominations based on the latest sales figures. That’s a whopping 455% increase over 2019, where 152,000 ounces were sold.
In the silver market, sales more than doubled compared to the previous year. The US Mint sold 30.01 million ounces of silver, a 101% increase over 2019.
Problems with the supply of gold and silver
In addition to the enormous increase in demand, the precious metals market has also experienced negative moments. In the past year, there were several lockdowns around the world to prevent the spread of the COVID-19 virus. However, these closures also led to the closure of several gold and silver mines, which interrupted their supply. The various restrictions imposed by governments, supply bottlenecks and a lack of transport options had a significant impact on the gold and silver market and led to longer delivery times, among other things. This was partly because the three largest gold smelters in Switzerland were closed at the same time and the transport of gold to and from London was no longer possible.
Gold and silver premiums also rose due to a decline in supply that went hand in hand with a massive surge in demand. The premiums have since been reduced to pre-COVID-19 pandemic levels due to an improvement in investor sentiment.
2020 was a year of generally more “lows” than “ups”. Gold has increased significantly, but will it continue in 2021? New government stimulus measures could certainly influence an increase in gold demand. In addition, inflationary pressures in the second half of the year could also act as an incentive to increase demand. There are several analysts who expect the gold price to rise further, surpassing the record high it recently reached. Some banks even speak of an average of $ 2,300 an ounce. For silver, analysts expect the price to rise above USD 30 an ounce. In fact, some analysts expect silver to rise above $ 50 an ounce.
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