Gold Prices Posted the Best Year in a Nearly a Decade

SEATTLE (Scrap Monster): Gold has ended the year on a strong note. The yellow metal recorded its best year in a decade during the previous year.

The gold’s gain was mainly driven by rock bottom dollar levels. Incidentally the greenback had plunged to the lowest level since April 2018. On the other hand, gold prices hit all-time during August last year. The spot prices in London Exchange had hit $2,075 per Oz, surpassing the earlier high recorded in September 2011. Also, holdings in gold-backed exchange traded funds (ETFs) had hit their peak in October 2020.

The roll out of vaccine against coronavirus pandemic has resulted in a slight pullback in gold prices from their highs, as it injected optimism into financial markets. However, continued weakness of dollar continued to support gold prices through the end of the year.

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There are mixed opinions among analysts on prospects of gold during this year. Morgan Stanley predicts that gold and other precious metals are likely to come under pressure. On the other hand, HSBC expects economic uncertainties to persist for a longer period, thus helping gold prices to scale new heights. The weak U.S. dollar and low real interest rates will offer continued support to prices. Meantime, Brexit may have lasting impact on the liquidity of the gold market in the long-term.