Is The Gold Trade Over?
Gold has had its fair share of ups and downs in 2020 with the pandemic and all. The gold market was hurt because of the slow or stop in production caused by the pandemic. Gold stocks will usually move when the price of the metal does. Putting that to the side, gold prices have gone up exponentially this year. The economy got destroyed by the pandemic and has still not shown signs of recovery. The pandemic is still roaring with some scientists predicted a winter spike in cases. Some analysts think that this could bring the price of gold above $1,900, maybe even to $2,000. So what else is impacting the current state of mining stocks?
Election Results Make Gold Rise
Well, that would be the election that just took place. When Biden was elected it caused the dollar to slip, which resulted in precious metal prices going up. So there has been many gold stocks to watch after the presidential election. Multiple gold stocks rose in tandem with gold prices as a result. Currently, the state of gold leaves a lot to wonder about. The world is in a place of volatility and uncertainty at the moment. So it’s not easy predicting what the best gold stocks to watch are.
The focus now would be what is to come in 2021. In January, the presidential inauguration will take place. This could affect the price of gold as a new candidate enters office. Vaccine news that is apparently highly effective was enough to tank gold $100 in price. While some things are helping the price of gold like the election, others are hurting it like the vaccine news.
Will Vaccines Affect Gold Prices?
Nobody has any idea when vaccines will be widely distributed, and if the public is willing to use them. Nobody knows how quickly the economy will be able to recover in this new normal of a world. The economy won’t simply recover just because of a vaccine. There has been a lot of damage done that will take time to repair, like the economic crisis in 2008. On November 18th the price of gold is at $1,871, it has gone up after vaccine news was released. In fact, the Moderna (MRNA Stock Report) vaccine news release didn’t affect the price of gold much at all. This is because Pfizer (PFE Stock Report) had already released similar news.
Not All News Makes Gold Trade
Sometimes things that would normally affect the price of mining stocks do not end up doing so. On November 18th the US Commerce Department stated that housing starts rose 4.6% in October, better than expected. Normally, this type of data would have an impact on the price of gold and mining stocks. Yet this news had very little impact on it, with gold futures only being down 0.65% on the day of.[Read More] Can You Make Money With Mining Stocks? 4 Top Silver Stocks To Watch
As things sit right now when it comes to gold prices, it is not likely to go lower than $1,850. The economy is nowhere near recovery as COVID-19 cases are on the rise. Vaccines are not in the near future in regards to distribution. If the US economy makes a recovery though, it can result in the price of gold going down significantly. With that being said, there are many top mining stocks to watch this year. The current risk that gold holds attracts more seasoned investors rather than newbies to the sector. Gold is able to hold its position well due to investors seeing gold as a safer investment than the dollar.
Silver Trading In 2020
What about the silver industry? Similarly to gold, silver has increased its value throughout 2020 as well. Usually silver stocks will move for similar reasons as gold stocks. Silver is a very commonly used material in the industrial sector. When industrial companies began production at near full capacity, more silver was needed which impacted the price of the metal. This has allowed for there to be many great high performing silver stocks this year. Silver has seen a similar rise in price as gold, but for silver investors the gains were more significant.
The Future of Gold and Silver Trading
So now what happens with silver & gold stocks? We await to see what the result is of the news that came from Moderna and Pfizer. We also await for the inauguration to take place and see how it will affect the price of gold. President-elect Joe Biden could implement different COVID-19 guidelines than President Trump has. This could result in the movement of gold and silver prices. Data regarding jobs and unemployment will also affect the price of these metals.
The risk exists when it comes to investing in gold stocks and silver stocks. But there is still a strong amount of support coming from current investors. This is allowing both gold and silver to stay within one relative price point. Mining stocks have potential from an investment standpoint which attracts investors to stay for a while. This is relevant while the economy continues to stay down and the pandemic continues to rise in numbers.
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