Gold, silver, palladium and platinum – the 4 precious metals of reference – benefit from a good potential for appreciation in the medium term, judges OFI Asset Management. In addition to an increase in inflation expectations, the price of gold would benefit from a gradual return of demand from industry, jewelry and central banks.
After having experienced a spectacular surge in recent months, gold has recently regained its breath. However, this movement is probably only a simple pause, before a surge well beyond the psychological bar of 2,000 dollars, crossed for a while this summer. Gold, a traditional bulwark against inflation and the erosion of purchasing power, could benefit in the medium term from an increase in inflation expectations, a scenario far from being ruled out by economists, despite the disinflationary shock caused initially by the economic and health crisis .
An increase in inflation expectations “on reasonable levels of 2.5% per year would allow gold to reach $2,400 per ounce”, according to our columnist Benjamin Louvet, commodities manager at OFI AM, who considers the risks weighing on this scenario “relatively low”. If the eventual announcement of a treatment against coronavirus could punctually affect gold (because it is considered as a safe haven), this fall in prices would not call into question the medium-term bullish scenario. And the gradual return of industrial demand, jewelry and central banks “could push the price of gold even higher,” says the manager.
Silver should benefit from the climate transition
Silver (silver metal, nicknamed the gold of the poor) has great potential for appreciation in the years to come, due to its importance in transition technologies, which are on the rise due to the challenge of global warming. Like gold, silver is also appreciated as a safe haven in these times of Covid-19 resurgence, but the white metal also has industrial applications, including electronic products and solar panels, which could benefit from the various global stimulus packages. For this upside potential for silver metal to be realized, “however, economic activity will need to return to a more normal pace. In the shorter term, the fate of silver is linked to that of gold because of its role as a precious metal,” emphasizes Benjamin Louvet.
Source Capital.fr
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