Polarized U.S., delayed recovery, inflation: Gold price to 'maintain high prices' in 2021

Gold last traded at $1,856 an ounce. Silver at $25.47 an ounce.

NEWS SUMMARY: Precious metal prices eased Friday on profit-taking and a firmer dollar. U.S. stocks retreated from record levels, as investors reassessed the ambitious Covid stimulus plan.

Kitco---"Gold remains an attractive investment this year as people opt for inflation-hedge options amid a myriad of risks, including a still divided U.S., according to StoneX.

'The precious metals sector was the best performing commodity group in 2020, rising on average by 27% Y/Y, led by silver, which in turn mirrored gold's movements as the latter benefited significantly from its characteristics as a hedge against multiple forms of risk,' StoneX said in its 2021 outlook. 'This year, with both geopolitical and economical certainty skewed to the downside, we expect that gold will maintain high prices, especially given negative real interest rates and excess liquidity seeking a home.'

Bullish factors for gold in 2021 include massive global stimulus, accelerating inflation risk, low real interest rates, geopolitical uncertainty, and a still divided U.S., the report highlighted.

'The United States, the European Central Bank, and the Bank of Japan have all been active with combined asset growth of over $7 trillion last year. With Congress' approval of a $900 billion virus relief package in the United States (tied to the $1.3 trillion government funding program) there is more liquidity coming; Europe may follow suit, while Japan is looking to extend support for the corporate sector,' StoneX said."