On Thursday, precious gold futures’ prices treaded water as an apparently death-crossed American currency had faltered further, though the bullion had registered its best annual gain in more than a decade last year, since a pandemic-battered 2020 had fleshed up the yellow metal’s safe-haven bid.
Aside from that, tens of billions of US dollar in fresh stimulus rolled out across the globe last year, had heightened up possibilities of a higher inflation alongside a rapid depreciation of major currencies, leading to a meteoric rise in gold futures’ prices.
Apart from the spot gold futures, which had snowballed as much as 25 per cent last year, a raft of precious metals had wrapped up the year with solid gains with silver contracts surged by 48 per cent last year, marking up its best yearly percentage gain since 2010, while palladium recorded a fifth straight year of annual gain, adding more than 25 per cent in 2020.
Aside from that, platinum futures’ prices had scored a second consecutive year of percentage gain.
Gold, other precious metals end 2020 at multi-year highs
In point of fact, last year’s gains in spot gold prices were almost entirely catapulted by an unprecedented extent of fiscal stimulus unveiled by a raft of Central Banks alongside Governments, while a persistent influx of fresh capital into the global money market had laid off the framework of a higher inflation alongside currency depreciation as beforementioned, eventually leading to an outstanding rally of the precious yellow metal.
Citing statistics, on Thursday’s commodity market wind down, spot gold futures remained largely unchanged at $1,892.97 an ounce, while US gold futures edged 0.1 per cent higher to $1,895.10 per ounce. Among other precious metals, having risen more than 25 per cent in 2020, palladium futures’ prices climbed 3 per cent to $2,433.61, while platinum contracts shed 0.2 per cent to $1,063.52, but clocked an annual gain of over 10 per cent.
Meanwhile, addressing to the US Federal Reserve and other G20 economies’ latest move to keep their benchmark interest rate near-zero in a bid to shore up a highly market-oriented global economy amid a pandemic outbreak at large, a head of base and precious metal derivatives trading at BMO, Tai Wong said late in the day, “U.S.
dollar has been slumping badly and can’t manage any rally, which is bullish gold. However, if the vaccine really is effective and we have the pandemic beat by summer, that may limit gold gains”.