Precious Metals Outlook 2021: Renewable Energy Will Be a Key Driver
The comments below are an edited and abridged synopsis of an article by Frank Holmes
Precious metals did well in 2020, and Holmes expects them to keep pace in 2021, supported by heightened efforts in the US and elsewhere to transition from fossil fuels to renewable energy.
Gold bullion gained more than 25% in 2020, its best year since 2010. The surge in money supply due to pandemic stimulus helped fuel the rally. The amount of M1 money moving around the US economy skyrocketed 66% from last year.
Last year marked the fifth straight year of positive gains for the yellow metal. In the past 15 years, gold has been up 80% of the time, a remarkable track record.
Silver was the best-performing precious metal in 2020, up nearly 48%. Palladium and platinum were also strong performers, up 26% and 11%, respectively.
The biggest headwind in the fourth quarter of 2020 was positive vaccine news. Gold suffered its biggest drop in seven years in November, when Pfizer announced it had developed an effective vaccine against Covid-19. The metal ended the month below $1,800 an ounce.
Up for discussion: 2021 could be another win for silver; Bitcoin will continue to challenge gold; mergers and acquisitions in gold; and platinum group metals (PGMs).