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The current outlook for gold means that forecasts calling for a record £1,641 ($2,300) price should be considered ‘conservative’, according to one industry analyst. The chief gold strategist for State Street Global Advisors, George Milling-Stanley says current price levels are helping to build a foundation following the enormous bull run of 2020 and are setting the precious metal up for much higher levels.

Milling-Stanley says the fact that gold gained £355 ($500) last year is notable and a period of consolidation is natural at this stage as the market adjusts to the new levels. He says, “The good news is it found solid support in the area between £1,248 ($1,750) and £1,284 ($1,800). I think that we’re doing the necessary work building a foundation before we move higher.

“In this country (USA), we need somewhere close to 700 million doses of vaccines. I don’t think anybody is realistically going to be able to deliver anything like that until late-summer or fall. In North America and Western Europe, we are making a terrible go of reopening our economies. In my view, that means there’s going to be no reduction, no drop-off in investment demand for gold.”

Even post-pandemic, Milling-Stanley seems strong support for gold, due to US President Joe Biden’s desires to address climate change, tackle inequality and repair US infrastructure. The analyst says these projects will be costly, something which will “lead to… bigger deficits, bigger debt, and therefore dollar depreciation” – something we know heavily favours bumper gold prices.

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