Happy New Year from all of us at GSC!

We have come to the end of 2021, let’s look back at how this year started. Many were hopeful as they believed that the Covid pandemic that has “washed out” 2020 would be over, and with Gold prices setting a new high last year, many expected an even higher price set this year. So how did Gold fare this year?

 

Gold set a high for the year on 6th January at US$1960 per oz before heading down and reached a low of US$1680 three times this year (8th Mar, 31st Mar & 9th Aug).  Gold is enroute to close the year at a loss of around 5.5% based on the opening price on 4th January 2021. Gold didn’t perform as well as what we have seen last year (a gain of 25%). However, Gold’s average price this year is the highest we have seen in the history of Gold. Surprise, surprise! This year Gold’s average price is around US$1798 (as of 29th Dec) compared to last year’s average price of US$1769. How will Gold fare in 2022?

 

Precious Metals Prices in 2022

With a backdrop of huge stimulus by most Central Banks, near to 0 or negative interest rates and highest inflation rates seen in more than 30 years; we believe this will provide good support to precious metals prices in the longer term as we don’t expect this to change within the next 3 to 5 years. We expect precious metals prices to be volatile next year as Central Banks will try to reign in the inflation caused by the stimulus by ending their bond buybacks program and increasing interest rates. This will create volatility in markets and inflation caused by unprecedented stimulus will unlikely be curbed within the next few years. Real interest rates will still remain negative even if the Federal Reserve raise interest rates 3 to 4 times next year due to the high inflation rate.

 

Moreover, Central Banks who usually wouldn’t buy Gold as part of their reserves might look to buy more Gold amidst this period of uncertainty. Singapore who hasn’t bought Gold in more than 20 years, has bought 26.3 tons of Gold this year. Thailand, Brazil and Japan for example, have bought Gold this year too. We expect more Central Banks to look to Gold to form part of their reserves in 2022.

 

Hence, we might see Gold testing the price level US$2000, Silver testing US$30 levels and Platinum testing US$1200 levels next year. Buying precious metals when prices pull back or buying using Dollar Cost Averaging strategy are best ways for accumulation. Use the volatility in your favour and remember, don’t put all your eggs in one basket! Other asset classes like equities, currencies, cryptocurrencies, properties are also important to look at in order to build a robust portfolio!

 

Gratitude

2021 also marks our 10th Anniversary and on behalf of the team in GSC, we want to say a big thank you to all our esteemed clients, business partners, family and friends for your unwavering support, encouragement and for being part of our golden journey.

 

May this holiday season be a good time for all of us to spend time with family and people who matter! We are thankful that borders have re-opened with Malaysia and many of our colleagues, friends and clients can finally spend time with their family in person.

 

Here’s to a better 2022 and many more good years together! Happy Holidays and Happy New Year!

 

Brian Lan, GoldSilver Central’s Managing Director