Gold up moderately in follow-up to yesterday’s sell-off, Goldman and Citibank stick to their bullish forecasts for 2021

(USAGOLD – 12/8/2020) – Gold is up $5 this morning at $1847 reversing yesterday’s selloff that took the metal at one point to a low near $1825. Silver is up 19¢ at $24.23. With little in the way of fresh news to explain yesterday’s downturn, we will put the blame on short-term profit-taking and technical selling – a response to the nearly $50 runup to start the week. We attribute this morning’s gains in turn to the opposite – opportunistic technical buying and short-covering. So it is that the end-of-year market seesaw continues. We remind with our customary caution that in recent years the market established solid ground in and around December 15th before beginning to move higher, as shown in this short study.

Goldman Sach and Citibank see better things ahead for the gold market in 2021. “In our view,” says Goldman’s Jeff Currie and Michail Sprogis in a client note cited at FX Street, “the structural bull market for gold is not over and will resume next year as inflation expectations move higher, the U.S. dollar weakens and emerging market retail demand continues to recover.” As such, itis sticking with its call of $2300 per ounce by the end of 2021. Cited in that same report, Citibank’s Aakash Doshi expects “vaccine news to slow, but not end, gold’s secular bull cycle” and forecasts the yellow metal to “end 2020 at around $1,900 per ounce” and reach $2,325 by the end of 2021.

Chart note: This chart is one of a three-part series on silver we are running this week. It shows the annual percentage increase or decrease in the price from 1971 to the present. As you can see, at more than a 30% return for 2020 thus far, silver is having its best year since 2010.