Money Talks

January 1th,2021

Retail investors see gold prices pushing through $2,300 an ounce in 2021

Although the gold market is struggling to interrupt above $1,900 an oz on the last trading day of 2020, the rally within the value isn't over yet as sentiment among retail investors remains extremely bullish before the New Year.

This past week, nearly 2,000 people participated in the special outlook survey, asking them where they see gold prices by the end of 2021. Out of 1944 votes cast, 1,646 participates, or 84%, said they saw gold prices over $2,000 an oz by the top of next year.

The average price of all the votes cast involves gold prices to push above $2,300 an oz. The biggest bloc of voters, 266, or 14%, involved gold prices to trade between $2,500 and $2,600 an oz.

Looking at the acute bullish case for gold, 152 participants, or 8%, of the vote involved gold prices to be above $3,000 an oz

There doesn't appear to be many investors neutral on gold as 212, or 11%, said they see gold price between $1,900 and $2,100 an oz.

Although gold prices down 8% from their August highs, there's not tons of negative sentiment within the precious metals market. Only 298 voters, or 15%, saw gold prices end 2021 below $2,000 an oz.

Looking at the acute bears, only 68 participants, or 3%, saw gold prices falling below $1,500 an oz next year.

The outlook among retail investors is comparatively in line with the analysts' 2021 forecast. Most major banks expect gold prices to average the year above $2,009 an oz, with some seeing gold peaking around $2,300 an oz.

Some of the banks calling for $2,300 gold in 2021 include Goldman Sachs, Commerzbank, and CIBC.

Not only are analysts bullish on gold as central banks maintain ultra-loose monetary policy through 2021, but rising inflation pressures thanks to economic recovery within the last half of the year are expected to stay real interest rates in low to negative territory.

Bank of American was the most important gold bull among financial institutions. In April, as central banks and governments around the world set free unprecedented amounts of liquidity into financial markets, the Bank of American said they saw gold prices getting to $3,000 by the end of 2021.

Since then, the bank has walked back its April forecast; however, the commodity analysts remain fairly bullish on the valuable metal, seeing gold prices average next year around $2,063 an oz.

"As the worldwide economy exposes, gold faces more challenges, making it tricky to hit $3,000/oz; that said, the continued fiscal and monetary stimulus should push the alpha-beta brass above $2,000/oz again," the bank's analysts said in its 2021 outlook report.

Leigh Goehring, the managing partner at Goehring & Rosenzweig Associates, said in an interview that he is expecting gold prices to push to $3,000 an ounce.

"2021 is going to be the year that investors believe that there's going to be a return of inflation. We haven't experienced anything like that for 40 years. At some point in 2021, it will happen. This is when the subsequent leg of the market will begin," Goehring said. "With all this money printing we've skilled in 2020, next year are going to be the year we are all disabused of the notion that we will print money without consequences. Gold can undergo $2,100, and that we could possibly challenge $3,000."