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Top 7 gold stories of 2020: From a boom in gold price to best buying opportunities

Kitco News

(Kitco News) As we say goodbye to 2020 and tabulate all of its highs and lows, here is a look back at Kitco's top stories from this very turbulent year.

1. The number one story from 2020 is about stocks being at risk of a massive selloff and gold's potential boom.

The cyclical bull market for equities is over, HS Dent founder Harry Dent told Kitco News in November.

After December, stocks will begin a secular multi-year decline, starting with a 40% correction by April, Dent pointed out. "If we see another new low in the stock market, I predict we are not going to see new highs on the Dow, S&P, NASDAQ, biotech, you pick anything... you're not going to see new highs on anything for decades," he said. "You didn't see new highs after 1929 for 24 years."

When it comes to gold, Dent expects to see its final rally to $2,200 an ounce next year before falling to multi-year lows. After 2022, the new lows should present a new buying opportunity.

"From 2022 on, I'd be buying gold hand in a fist; it's going to hold up better than most commodities," he said.

2. Gold's historic price climb to a new record high of $2,075 this year brought along a few very bold price calls.

The Federal Reserve's balance sheet is at risk of devaluation, and should the underlying assets fail, gold will respond by "rising to a price that balances the Fed's balance sheet," Myrmikan Capital founder Dan Oliver told Kitco News in June.

"The Fed, as you know, has been on a massive purchasing spree because of the virus situation, and so, therefore, the equilibrium price of gold is going up commensurately, and so the numbers now to balance that balance sheet are enormously high," he said. "My [forecast for gold prices] has changed. I'm at $10,000 now."

3. Gold is going to $3,000 as U.S. deficit continues to rise sharply as a percentage of GDP, said WingCapital Investments in March. 

Historically we notice that the level of deficit relative to GDP exhibits even higher correlation than the size of Fed's balance sheet," WingCapital Investments said. Specifically, we observe that gold's previous secular bull run ended when deficit /GDP started declining and did not bottom until the ratio's trough in 2016."

In this environment, the analysts said gold prices could rise to $3,000 over the next three years.

4. The end of this year and the beginning of 2021 might be the last great opportunity to buy gold, according to Goehring & Rozencwajg Associates managing partner Leigh Goehring. 

Perspective is everything when it comes to price drops, Goehring told Kitco News back in August, noting that this pullback, in particular, might represent "the last great buying opportunity."

"It is not uncommon for bull market moves like this. This bull market started at $1,050 and got as high as $2,050. To give back 50% of it, you would have to pull all the way back to anywhere between $1,500 to $1,700 in gold," he said.

This massive price drop could strike any time this year or at the beginning of 2021, stated the managing partner. "From then on, the gold bull market goes crazy," Goehring said.

In terms of how high the next rally will take us? Goehring projects for gold to climb as high as $15,000 an ounce by the end of this decade.

5. As gold prices surged over the spring and summer months and the coronavirus pandemic saw economies close, there was an unprecedented jump in demand for the physical precious metals. This was mixed in with logistical difficulties, which created severe gold and silver shortages.

6. After gold's rally peaked in August. The precious metal began to consolidate as prices lost steam, which made for a very nerve-racking time for all the gold bulls out there. 

7. Another earth-shuttering August headline was the long-time precious metal bugaboo Warren Buffett buying gold as he loaded up on Barrick Gold (NYSE:GOLD), the Berkshire Hathway 13F revealed. 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.