The Price of Gold Will Rise to $2,300 in Q4 of 2021

The gold rally that started in mid-2019 is not only not over. However, after the momentum, it registered last summer and the correction starting in September, the best is yet to come. According to Commerzbank analysts, the metal price will reach $2,300 an ounce in the fourth quarter of this year.

Even though the gold price has left the highs it reached last August, the metal has experienced a significant revaluation since the beginning of 2020.

Although the news regarding the discovery and deployment of new vaccines against the virus has cooled investors’ interest in gold, Commerzbank assures that the effects of the Covid-19 pandemic won’t subside during 2021.

Governments and central banks injecting liquidity into financial markets to support gold prices

The bank analysts point out that they do not expect changes in the ultra-expansive fiscal and monetary policy, despite the vaccines against the coronavirus. Instead, governments and central banks act as key figures. Their role is to establish a cushion that limits the harmful effects of the pandemic on the economy and society.

According to the German bank, with governments and central banks injecting liquidity into financial markets, it is only a matter of time before the price of gold returns to its highest levels.

This year, Commerzbank analysts estimate a median price of gold at around $2,000 an ounce. They predict a peak of $2,300 an ounce in the fourth quarter.

The rise will continue through 2022. It seems the average price of gold estimated by the bank’s analysts will rise to $2,200 an ounce. The pandemic may be controlled in the second half of 2021, through the immunization of the population. However, the massive increase in public debt levels caused by central banks’ monetary policy will continue to be present. The Federal Reserve does not plan to change its monetary policy until inflation does not exceed 2%. They also expect to wait until full employment is reached. And both criteria have rarely coincided during the last 20 years, the report notes.