Silver futures and ETFs rallied significantly on the first day of the new trading month, despite World Bank forecasts of lower gold prices in 2021 and 2022.
In its April commodities report, the international financial institution said it expects gold prices to average around $ 1,700 an ounce this year, and the shiny metal could fall even lower, to $ 1,600 next year.
Ironically, the World Bank’s outlook for gold emerged as gold struggles to find enough positive momentum to break the $ 1,800 an ounce mark. June gold futures were last traded at $ 1,793.70 an ounce, up 1.5% on the day.
Silver, meanwhile, rallied on Monday, with next month futures rallying 4.59%, breaking the $ 27 level and adding $ 1.19 an ounce to the industrial metal.
A Tale of Two Metals
The World Bank’s Commodities Report notes that while gold prices may decline in the future, other commodities are doing well as investors continue to push for economic recovery.
“Nearly all commodities are currently above pre-pandemic levels, and some commodity prices, especially metals, are well above their previous levels – copper prices were almost 50 percent higher in March 2021 compared to the end of 2019. driven by an improved global economic outlook, fueled by significant monetary and fiscal stimulus in advanced economies and stable, albeit uneven, vaccination rates, ”analysts say in the report.
Looking at the entire metals group, the World Bank is forecasting a 30 percent jump this year, with a correction in 2022 as the global economy begins to normalize. Meanwhile, analysts predict gold prices will fall 4% this year due to factors such as rising bond yields and weakening demand.
“Higher real returns make gold less attractive to investors. Gold-backed ETFs have also plummeted in recent months, and central banks have cut gold purchases. Demand for physical products is recovering from a significant decline in 2020, but remains well below pre-pandemic levels, ”analysts said.
However, there is good news for gold’s “little brother”, silver. Analysts predict silver prices will rise 22% this year on stronger industrial demand.
“Prices were boosted by a rebound in industrial demand (electronics, cars and solar), which accounts for more than half of silver consumption (compared to less than 10 percent for gold). Investment demand has also been robust, with investors holding net long positions since mid-2019, ”analysts say.
For investors looking for more growth opportunities for silver, there are several options, including Sprott Physical Silver Trust (PSLV)…
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