Daily Market Recap - GOLD Tanks below 1,800 per ounce

Gold, which had started 2021 on a strong footing, lost more than 2% on Thursday and is now down 5.8% since the beginning of the year. The precious metal has fallen victim to the return of risk appetite and resurgence in the US dollar and Treasury yields.

The announcement on Thursday in the US of a fall in unemployment registrations for the third consecutive week reinforced the expectations of an acceleration in economic recovery, which contributed to the disinterest of the investors for safe havens like gold and silver.

Metal prices were also dampened by the dollar's rebound, which is making purchases more expensive for international investors: the dollar index gained 0.43% on Thursday to 91.56 points against a basket of currencies, rising to its highest level in more than a year.

Silver for its part lost roughly 2 percent down to $26.33 per ounce, erasing the speculative wave that had briefly raised it above $30 on Monday due to purchases by small-time traders from the Reddit forums seeking to speculate on the metal.

Overall silver has been stable since the beginning of the year but has gained 45% year-on-year (compared to +12% for gold), supported in particular by the demand for silver from the solar panel industry.

In a note published on Tuesday, UBS mentioned that it is cautious on the outlook on gold in 2021, estimating that the demand of the investors (mainly in the jewelry industry and that of the central banks) should slow down in 2021 taking into account the slow economic recovery from the covid-19 pandemic.

Gold Daily Chart:

Silver Daily Chart:

(Chart Source: Tradingview 04.02.2021)

UBS analysts expect a high of $1,900 per ounce in the first half of the year before returning to $1,800 in early 2022. Despite these limited prospects, the Swiss bank considers that within the framework of an investment strategy, it remains entirely justified to keep some gold in the portfolio.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.