Gold Price Forecast 2021

• Gold and precious metals are in a new bull markets that should last well into 2030. 

• The destruction of goods and services combined with unprecedented money printing is creating a perfect inflationary storm. 

• Increased civil unrest and violent protests may expand in 2021 over food shortages and contentious government lockdowns. 

• Owning physical precious metals is an excellent way to protect your portfolio and your family over the next decade. 

Physical Demand

I will start our 2021 Gold Price Forecast with a quick update on physical demand. In our Metals Market Annual Recap (snippet below), I noted how record low gold eagle coin sales likely marked a bullish turning point for precious metals. That turned out to be timely as demand for precious metals soared in 2020. Premiums have jumped, and Gold Eagle coin production is up over 400%, despite production challenges.

Record Low Gold Eagle Coin Sales In 2019 (December 31, 2019)

Investment demand for physical gold was low, especially in the US. In its 33-year history, the US mint produced the least amount of gold eagle coins ever – just 152,000 ounces. That’s a decrease of about 85% from the 985,000 ounces created in 2016. Note: I view this as an incredibly bullish (contrary) indicator. Despite gold’s obvious breakout – the average investor remains oblivious.

The 2019 breakout in gold prices supports a new bull market that should carry well into the next decade as governments realize the consequences of loose monetary policy and negative interest rates. Eventually, the public will wake up, but by then, it may be too late.

Physical precious metals in your possession are favored. I prefer coins from the US Mint over bars or rounds. Generic bullion products can be counterfeited more easily. When it comes time to sell, you will want something respected and recognizable. 

Long-Term Gold Forecast

The technical pattern in gold is incredibly bullish. Prices broke out of a 6-year base in June 2019 and confirmed a new bull market (similar to 2003). Using a parallel price projection, gold could reach $8500 and probably much higher if precious metals enter a bubble phase, as I believe. 

Gold Monthly Chart:

A Recipe for Inflation 

The chart below depicts M2 money supply. Note that during the 2008 crisis, there was little to no change in M2 trajectory. That is because monetary stimulus back then remained on bank balance sheets - little entered the actual economy. This time is different. Since March 2020, M2 has jumped nearly 25% and continues to soar. 

Fed Balance Sheet

The Fed's balance sheet leapt from 3.8 trillion to 7.2 trillion since Q3 2019. It continues to climb at 9-billion a day and could exceed 10 trillion by the end of this crisis. 

A Perfect Storm

The coronavirus pandemic has devastated global GDP. Productivity is down across the board, and small businesses are being decimated. Governments fired up the printing presses in response and are spending like crazy - this will end in disaster. Anytime you have more money chasing fewer goods and services, inflation is inevitable. Historically, gold is an excellent inflation hedge. 

Civil Unrest and Revolution

In a recent interview, Martin Armstrong noted the potential for revolution, civil war, and a global depression by 2022. The interview aired November 19, 2020, on Financial Sense. I've been listening to Martin for years - his warning deserves your attention. Note – you will need premium access if you want to hear the interview.

To Paraphrase: Mr. Armstrong sees the potential for violent protests and blood in the streets by April or May 2021, possibly over continued lockdowns. That is correct – he believes lockdowns may extend well into 2021. He went on to say global GDP could fall by 50% from the pre-COVID high, and we could see revolution beginning in some countries as early as next year. 

Under his grim scenario, precious metals would likely explode higher (me talking now). The dollar could rise as a flight to safety, especially if revolution begins overseas first. Cryptocurrencies could benefit as investors move money across borders. Large investors will likely park assets in blue-chip stocks.

Gold Near-Term Forecast

Gold spiked to $2089.20 in August before entering a multi-month corrective phase. Prices recently tested support near $1770. Our Gold Cycle Indicator triggered an initial buy signal on November 23, 2020, and again on November 27, I began adding to our Premium Metals Portfolio then. Historically, buying near the rising 200-period MA in a bull market is considered an excellent long-term entry. 

Note- We could see one more dip in late December. 

Gold Cycle Indicator: The GCI is below 100 but rising after reaching 46. One more dip in December is possible if the value stays below 100.

In 2021, gold prices could reach $2300 and perhaps as high as $3500, depending on geopolitical developments. Longer-term, I believe prices are going much higher. I am even more bullish on silver, platinum, and miners. 

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. He posts daily updates to Premium Members. For more information, please visit here.