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Scotiabank says it is bullish on precious metals with gold having an important role to play in any investor portfolio. The Canadian bank says that the precious metal will continue at an elevated rate through the rest of the year – even allowing for a widespread global recovery as countries vaccinate against COVID-19 and economies open up once again.

The bank’s senior economist, Mark Desormeaux said that the dollar is expected to fall as the economy recovers, leaving precious metals in a stronger position overall. Gold will also be further strengthened by inflation expectations and an accommodative monetary stance, according to the bank.

In a briefing note to investors Desormeaux explained, “An exit from emergency economic conditions and the prospect of a stimulus-led global recovery is feeding inflation expectations and devaluing the USD, supporting precious metals… We expect the greenback to continue to depreciate as global economic conditions and risk sentiment improve, which should support the values of commodities priced in the world’s reserve currency.

“Rock-bottom interest rates and the Federal Reserve’s stated tolerance for above-target inflation continue to underpin prices for classic inflation hedge gold. Though the yellow metal is thus far down incrementally versus January, it remains at historically elevated levels.”

With the scene set for gold to remain on its bull course through the year, now is the time to buy. Act quickly.

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