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World Bank project’s gold prices to plunge further in 2021

World Bank project's gold prices to plunge further in 2021
Oliver
Scott
3 days ago
2 mins read

The World Bank is projecting the price of gold to continue dropping in 2021 and 2022 as demand in key markets remains strained.

The institution’s April commodity report notes that in 2021, gold will be trading at an average of $1,700 an ounce. In 2022, World Bank analysts expect the precious metal to trade at an average of $1,600 an ounce.

At the moment, the precious metal is attempting to break the $1,800 per ounce barrier. Notably, the current gold price went against expectations of analysts trading lower than than the broader commodity market.

However, the World Bank points out that most commodity prices are above the pre-pandemic levels. The institution said compared to other precious metals, gold will fall 4% in 2021, mainly due to weakened investment demands resulting from the improving economy and rising bond yields.

The World Bank puts the entire metals ecosystem price to rise 30% in 2021, with an expected correction next year.

“Higher real yields make gold less attractive to investors. Gold-backed exchange-traded funds holdings have also fallen sharply in recent months, and central banks have reduced gold purchases. Physical demand is recovering from a substantial decline in 2020 but remains well below pre-pandemic levels,” the analysts said.

Silver to surge in 2021

The silver prices are projected to surge 22% in 2021, powered by rising industrial demand. On average, silver prices will trade $25 per ounce this year, while next year, it is expected to drop $22 per ounce. Elsewhere, the bank notes that platinum has great potential after the metal’s price rallied 24% in the first quarter.

The World Bank analysis comes after the price of physical gold plunged in India, one of the key markets. With the country witnessing strict lockdown measures, most stores have remained closed amid dropping demand. Therefore, more dealers are selling gold at a discount of about $2 per ounce.

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Oliver Scott
Author

Oliver is a revolutionist in the sense that he embraces change as it comes. He is passionate about blockchain, digital assets, the Internet of Things, Artificial Intelligence, and all evolving technologies. At Finbold.com Oliver covers data-driven stories and researches that reveal meaningful insights for the reader.