According to Bloomberg Intelligence, the yellow metal exchange rate is resuming an upward trend, as evidenced by its underestimation regarding crude oil quotes.
Mike McGlown, senior commodity asset analyst at Bloomberg Intelligence, believes that gold prices will not rise above $2,000 in the near future. An increase in precious metal quotes is possible amid an unstable employment situation in the United States. From a technical point of view, the gold exchange rate is underestimated relative to oil, but the situation in the future will improve in favor of the yellow metal. New technologies and strong economic incentives are designed to neutralize current deflation. The ratio of the price of gold to the quotations of Brent crude oil is restrained by a further decrease in precious metal quotes.
According to McGlown, the gold exchange rate will reach the level of support above $1,900 per ounce if Brent crude falls below $70. The recent rally in precious metal prices was the result of overcoming two main obstacles along the way: higher yields on US Treasury bonds and a sharp increase in the rate of bitcoin. The current position of precious metal can be compared with the situation in 2018, when its rate was at the level of $1,200 per ounce, and the yield on 10-year US Treasury bonds peaked at 3%.
In the near future, silver quotes will not overcome the mark of $30. However, the long-term prospects for gray metal look promising. Its rate may reach new price highs. The fact is that silver is widely used in dynamically developing industries, where its characteristics and properties are in great demand: green energy and nanotechnology. Demand for gray metal may grow by 10% year-on-year in 2021.