Gold, Silver, and Palladium Performance in 2020
- 2020 was a good year for Gold and other precious metals as the economy weakened amid the coronavirus pandemic. Gold reached its all-time high of $2073 in August 2020. Gold, at the time of writing this article on December 23, 2020, was trading at around $1864 about 68.6% higher (Fig. 1) than its eight years low of $1046.25 in December 2015.
- Silver was lagging the gold most of the time since late 2017 and got ridiculously cheaper than gold when the world’s economy was frozen in march 2020. However, as can be seen in Fig. 2, silver has outperformed gold and palladium in 2020 as the economy started to recover. Silver is both an industrial metal and a safe-heaven asset. In addition, it’s more affordable than gold to attract the attention of an average investor in times of major crisis. The gain in the price of silver since late 2015 is almost the same as gold i.e. 68.45% (Fig. 1) and still has a lot of room to run higher if it follows history.
- Palladium has done extremely well compared to gold and silver. It’s trading at about 270% higher price since 2015. The major factor contributing to the rise in palladium’s price is the lack of supply and increased demand from the auto sector as the metal is used in catalytic converters that reduce emissions in gasoline engines.
Gold and Silver Mining Stocks Performance in 2020
I shared some of the gold and silver mining stocks in the first half of 2020 with anticipation of a 100% return. Here are the links for your reference:
- Top Junior Silver Mining Companies Ready for Explosive Gain in 2020
- 10 Top Junior Gold Mining Stocks for 100% Return in 2020
The year-to-date price of silver, as of December 23, 2020, rose by 43% and outperformed gold by about 20%. Silver mining stocks mentioned in my article gained 117% on average with AbraPlata Resource Corp. posting the highest return of about 669%. Those who have picked the same silver mining stocks near march lows are enjoying a 294% return in just a year.
Gold mining stocks on average gained 94% since December 18, 2019, and about 192% from their March bottom. Looking at the daily price comparison of the stocks, currently, three stocks are showing more than 100% gain with Pure Gold Mining at 291%, Banyan Gold at 253%, and Gold Mining inc at 147% gain. However, seven out of ten stocks have met our target of 100% return in 2020 which is really good.
Performance of Gold, Silver, and Palladium During 2008-2011 Bull Market
Silver outperformed gold and palladium during the 2008 to 2011 precious metal bull market by posting a gain of %400. Palladium and gold rose by about %300 and %166 respectively. Comparing the current bull market with the previous one, I strongly believe that we are still in the early phase of the current bull market and expect to see more gains.
Price Targets for Gold, Silver, and Palladium in 2021 and Beyond
Gold has broken ALL the bear market down-trend resistance lines on the non-log chart as shown in the chart below. This seems to be just the beginning of a parabolic move in the gold price that could end up in at least a five to ten-fold increase in the current price as many gurus in the mining sector suggest. I have posted a detailed long-term analysis of gold based on the Elliot Wave Principle suggesting gold could reach $13000 in twenty-six years. This target is still very conservative at a compound annual growth rate (CAGR) of 7.4%. Industry experts are projecting a way higher price e.g. $25000 at a CAGR of 9.3% and $174000 at a CAGR of 16.5%.
It’s good to know where gold will be in 30 years, but I am more interested in exploring the near term opportunities. So, the first near-term target for gold in 2021 in my opinion is 2020 high which is also close to 0.618 times the Fibonacci extension of the peak gold price in 2011. Once that clears, we could see the gold testing $2384 level lying at 0.786 times the Fibonacci extension.
How to Benefit from Rising Gold and Silver Price in 2021?
Even though gold and silver mining stocks have shown an awesome performance in 2019 and 2020 compared to the physical gold and silver, we are nowhere close to the maximum historic price levels in the junior mining sector. One of the main reasons is high demand as investors are looking for safe-haven investment opportunities in the current weak economy and geopolitical tensions around the world.
- If you are not very knowledgeable about investment and trading and have a lower risk tolerance, a better option would be to buy silver bars or mutual funds with higher exposure to the mining and/or resource sector.
- If you are an aggressive investor, invest in quality gold mining stocks with top-class assets, no debt, and a great management team.
- Silver and Silver mining stocks generally tend to outperform gold and gold mining stocks. We are experiencing the same trend in 2020 and this trend is going to continue in 2021. So, investing in silver mining stocks also can be very beneficial. During 2020, my portfolio has gained decent exposure to both gold and silver mining companies and I am happy that I made that choice.
- I discussed some undervalued gold and silver mining stocks in my articles “ten gold mining companies that can offer great short term returns” and Top Junior Silver Mining Companies Ready for Explosive Gain in 2020 that had a great return in 2020. I am still holding more than ten stocks from those two lists and currently exploring profitable opportunities for 2021
- However, there are hundreds of very undervalued gold and silver mining companies. I am continuously searching for new investment and trading opportunities in the mining and other sectors. If you want to stay updated about my new stock picks please subscribe to my mailing list: