Gold Trends 2020: Fear and Debt Push Gold to New Heights

In 2020, the gold price reached a new all-time high. Here’s a recap of the major gold trends of the year quarter by quarter.

Click here to read the previous gold trends article. 

2020 has been a remarkable year, to the say the least. Gold hit its lowest point of the 12 month period in March on the back of widespread volatility related to COVID-19, but later benefited from deep uncertainty when it reached an all-time high in August. 

The coronavirus and its pervasive effects across worldwide markets prolonged safe haven demand for the yellow metal, driving its ascent to US$2,063 per ounce. The US election, global stimulus initiatives and currency devaluation were also catalysts for the move.

Gold’s August threshold ultimately proved unsustainable, and the yellow metal fell below US$2,000 shortly after. Holding at around US$1,970 in early September, its price has been declining since.

Now trading in the US$1,820 range, gold appears to have found a floor at about US$1,800. If its Q4 pullback holds, the yellow metal will finish the year roughly 17 percent higher than it was in January, similar to the percentage uptick that it saw in 2019.

News that several pharmaceutical companies are getting close to mass rollouts of COVID-19 vaccines has added headwinds for the safe haven metal, although long-term fundamentals look promising.

“The gold market will move up and down as all markets do, but in my view we are unfortunately headed toward higher gold prices,” said Junior Stock Review’s Brian Leni.

“My guess is that we have only seen the tip of the iceberg in terms of quantitative easing (QE), and I think that it is entirely possible that we see negative real rates in the future — truly frightening.”

As many analysts have remarked this year, COVID-19 may have been the catalyst for recent market woes, but the environment for higher prices has been shaping up for several years.

Gold trends Q1: Volatility sets stage for growth

The year started with gold trading for US$1,552.30. Pre-COVID-19 activity was largely the result of tenuous geopolitical relations between the US and Iran, as well as tough trade negotiations with China.

By mid-February, gold had spiked above US$1,600 as cases of COVID-19 began to emerge.

2020 gold price chart

2020 gold price performance. Chart via Kitco

On March 6, gold hit a seven year high of US$1,673.10 as nations around the globe began planning lockdowns to combat the spread of the coronavirus.

Mid-March saw panic set into the market, with margin calls leading to a massive selloff.

The S&P/TSX Composite Index (INDEXTSI:OSPTX) exhibited its worst showing in 80 years in mid-March, while the Dow Jones Industrial Average (INDEXDJX:.DJI) recorded its poorest day since October 1987, falling 37 percent. Gold also slumped, falling to a six month low of US$1,498.80.

Market chaos and shutdowns spurred government spending and stimulus globally. Leni believes people have become used to these efforts and thinks they have likely run their course in terms of usefulness.

“The global financial system was first shocked by the credit crisis in 2008,” said Leni, explaining that central banks responded with excessive QE and “ultra-low interest rates.”

“These forms of stimulus have enabled the world economies to stay afloat over the last 10 years, but in my view, it was only ever a matter of time before we saw major issues arise once again,” he added. “COVID-19 was the straw that broke the camel’s back, as they say.”

Gold’s fall below US$1,500 was brief, and a rush to the safe haven asset class propelled the metal above US$1,600 by month’s end.

“When you look around the world, of all of the asset classes of all of the markets, gold to me does have the best risk/reward in the current environment, so I would certainly recommend a pretty high allocation for all investors,” Adrian Day of Adrian Day Asset Management said during a March interview.

Gold trends Q2: Price steadies, ETFs thrive

Gold had a steady growth pattern for the second quarter, climbing 9.2 percent. Continued risk aversion paired with record-setting exchange-traded fund (ETF) growth contributed to the increase.

The three month period saw ETF inflows climb by 434.1 tonnes, and the first six months of the year brought record growth in the ETF space — more than 733.9 tonnes worth US$40 billion were added.

2020 gold ETF flows

2020 gold ETF flows. Chart via the World Gold Council.

“I would say first, with the economic and geopolitical uncertainty, lofty stock valuations and low-rate environment, there’s certainly been drivers for investment demand, and that clearly led some new investors into the space,” Adam Perlaky, researcher at the World Gold Council, told INN in June.

“But I also think the growth in the number of funds globally has also given access to additional investors.”

Increased access has led to the most successful year in ETF history. To date, the gold ETF space has seen inflows of 1,022 tonnes, 376 tonnes more than the previous record 2009 record of 646 tonnes.

In Q2, the impact of Q1 shutdowns began to have an impact on gold production.

“The COVID-19 pandemic resulted in several major gold-producing countries enacting lockdowns that required mines to temporarily halt operations,” said Adam Webb, director of mine supply at Metals Focus. “Most of these began being implemented from mid-March, with the final nationwide lockdowns affecting mining lifted by the end of May.”

Webb noted that gold production was most significantly impacted in Peru, South Africa, Mexico and China. Canada also experienced dislocation but it varied by province.

“Outbreaks at individual mines and local communities have continued to cause problems at some operations; however, disruption has eased in the second half of the year,” he said. “As a result, we are expecting annual global gold production to fall by 4.6 percent year-on-year in 2020.”

Gold trends Q3: Price hits all-time high

July saw gold sitting in the US$1,774 range before a rally set in mid-month. Pushed higher by a tanking US dollar, the yellow metal reached US$2,063 in early August. The greenback simultaneously sank to a two year low at the time, forced lower by inflationary tones.

“(COVID-19-related) financial destruction has enabled governments and central banks to again flood the financial system with QE,” said Leni. “In particular, the US is leading the way, printing more money in March, April and May than they did in the years following the 2008 credit crisis — scary.”

Adding 32 percent to its value between January and mid-August, gold’s new highs prompted speculation that the price could climb even higher in the near term.

“The COVID-19 pandemic has created enormous global stresses which are accelerating the need for gold to go into the US$2,000, US$3,000 range,” said Kaiser Research’s John Kaiser.

“I wasn’t really expecting it to break through until 2021, but I think we’re on the threshold. It seems to be paused right now, sort of waiting … but I think once it does (break through) then it’ll move around back and forth between US$2,000, US$3,000.”

Watch the video above to hear Rick Rule discuss the factors motivating gold prices

Unable to maintain its all-time high, gold fell back below US$1,950 by mid-August. A stronger US dollar, rising equities and the potential for another round of stimulus in the US all weighed on gold’s ascent.

Gold trends Q4: November surprise

The first three quarters of 2020 saw the gold price move from US$1,552 in January to US$2,063 by August, but Q4 has proven to be much more volatile.

Starting the period in the US$1,898 range, the price continuously fell lower through October and was holding at the US$1,895 level by month’s end.

A minor spike moved gold to US$1,949 ahead of the US election as speculation around whether Republican Donald Trump or Democrat Joe Biden would be better for gold reached a fever pitch. Some analysts noted that either way there would be a long road to economic recovery post-pandemic.

“I think (the price) would stay about the same. I mean, bottom line, the amount of money that’s being pumped into the system, in the trillions of dollars and the push towards inflation, those things aren’t going to change regardless of who’s in charge,” Brent Cook of Exploration Insights told INN in October.

“I think probably more impactful for the gold price is going to be when and if a (COVID-19) vaccine becomes widely available, which starts kicking the US economy back into gear.”

Cook’s prediction was correct. A mid-November announcement from Pfizer (NYSE:PFE) regarding its vaccine sent gold lower. From November 13 to the end of the month, gold shed 5.4 percent.

Despite positive vaccine news, Gerardo Del Real of Digest Publishing believes gold will recover.

“The impact (of a vaccine) may actually be negative for a quarter or two as there will be less of a demand for stimulus initially,” he said. “This will of course be short term as governments do everything in their power to inflate away debt, but for the next quarter or two there may be a continued consolidation in the gold price before the next leg higher.”

Falling below US$1,800 for the first time since July, gold appears to have bottomed at US$1,780 on November 30.

A US$908 billion dollar stimulus proposal made headlines in early December, the same day that Biden urged lawmakers to agree on a deal before January.

“Right now, the full Congress should come together and pass a robust package for relief to address these urgent needs,” said the president elect.

How much stimulus and who should get it has become a hot-button issue during the final days of  the Trump presidency. A group of bipartisan senators proposed the US$908 billion cash infusion, while Senator Mitch McConnell noted he is discussing a smaller new proposal with Trump staffers.

Stalled stimulus and spiking COVID-19 cases in the US pushed gold higher for the first days of December as the price edged back above US$1,800.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Kirkland Lake Gold Ltd. today announced that at a special meeting of shareholders held earlier today the Company’s shareholders voted in favour of the arrangement resolution approving the proposed merger of equals whereby all of the issued and outstanding shares of the Company will be acquired by Agnico Eagle Mines Limited for common shares of Agnico Eagle in a merger of equals for consideration per Kirkland Share ...

Kirkland Lake Gold Ltd. (" Kirkland Lake Gold " or the " Company ") (TSX:KL) (NYSE:KL) (ASX:KLA) today announced that at a special meeting of shareholders held earlier today (the " Meeting "), the Company's shareholders voted in favour of the arrangement resolution (the " Kirkland Arrangement Resolution ") approving the proposed merger of equals whereby all of the issued and outstanding shares of the Company (the " Kirkland Shares ") will be acquired by Agnico Eagle Mines Limited (" Agnico Eagle ") for common shares of Agnico Eagle (the " Agnico Shares ") in a merger of equals for consideration per Kirkland Share equal to 0.7935 of an Agnico Share (the " Arrangement ").

186,840,773 Kirkland Shares, representing approximately 70.85% of the issued and outstanding Kirkland Shares as at the record date, were voted at the Meeting. The Kirkland Arrangement Resolution was approved by 150,681,106 Kirkland Shares or approximately 80.65% of votes cast by Kirkland Lake Gold shareholders either in person or represented by proxy at the Meeting. The report of voting results will be made available under the Company's profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov .

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Agnico Eagle Mines Limited (TSX: AEM) (NYSE: AEM) (" Agnico Eagle ") is pleased to announce that at a special meeting of shareholders held earlier today (the " Meeting "), Agnico Eagle shareholders voted overwhelmingly in favour of the resolution approving the issuance of Agnico Eagle common shares in connection with the proposed merger with Kirkland Lake Gold Ltd. (" Kirkland Lake Gold ") by way of a plan of arrangement under the Business Corporations Act ( Ontario ) (the " Merger ").

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As part of the long-term strategy to maximize shareholder value, B2Gold expects to declare future quarterly dividends at the same level. This dividend is designated as an "eligible dividend" for the purposes of the Income Tax Act ( Canada ). Dividends paid by B2Gold to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes.

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cannabis plant layered with German flag graphic
Dmytro Tyshchenko / Shutterstock

Catch up on some of the biggest news of the week for the cannabis investment world.

Three political parties have formed a coalition in Germany, leading to a new government, and it has promised cannabis reform in the European nation.

Meanwhile, a popular cannabis retailer confirmed consumers will now find its products available for delivery on the Uber Eats mobile application in Ontario.

Keep reading to find out more cannabis highlights from the past five days.


Coalition of parties promises forward-looking cannabis policy

Germany, a country with comprehensive and elaborate medicinal rules for cannabis, is in a time of transition as a new government is set to begin to take over after 16 years of Angela Merkel.

Olaf Scholz, the proposed next chancellor of Germany, leads a three party coalition that will become the country's governing body. As part of its promises, talk of adult-use cannabis regulation has now gained even more momentum. A report from MJBizDaily quotes a German policy document that shows the coalition's stance:

"We are introducing the controlled distribution of cannabis to adults for consumption purposes in licensed shops. This controls the quality, prevents the transfer of contaminated substances and guarantees the protection of minors."

However, despite the promise and excitement, it remains to be seen how these ideas will be applied since no formal regulations have been drafted or approved yet.

Canadian cannabis retailer partners with popular delivery app

Tokyo Smoke, a cannabis retail operator in Canada owned by Canopy Growth (NASDAQ:CGC,TSX:WEED), announced a collaboration agreement with Uber Canada (NYSE:UBER) whereby cannabis consumers will be able to use the Uber Eats app to order products before they visit stores.

While the app won't let consumers get cannabis delivered to them, this new method opens the doors to more dynamic ways of buying cannabis.

"As a market leader in innovation and a platform used by so many Canadians, we believe this is the ideal next offering that can be done safely and conveniently on the Uber Eats app," Mark Hillard, vice president of operations with Tokyo Smoke, said in a press release.

A report from the Canadian Press indicates Ontario is considering allowing dispensaries to have delivery and pickup options made available to consumers permanently. The province allowed some of these purchasing options at the outset of the COVID-19 pandemic, but then removed them.

Lola Kassim, general manager of Uber Eats Canada, said this new end-to-end experience will provide consumers with responsible access to legal cannabis products.

Cannabis company news

  • Organigram Holdings (NASDAQ:OGI,TSX:OGI) issued financial results for its Q4 2021 period. In its report, the company notes a net loss of C$26 million despite a 22 percent uptick in net revenue to C$24.9 million. Beena Goldenberg, the newly appointed CEO of the firm, is encouraged by the market share position earned by the company, which said it became the fourth biggest producer in Canada during the reporting period.
  • Halo Collective (NEO:HALO,OTCQB:HCANF) confirmed the decision for Akanda, its spinoff company focused on international cannabis opportunities, to begin trading on a US exchange. "The number of shares to be offered and the price range for the proposed offering have not yet been determined," the company told investors in a press release.
  • High Tide (NASDAQ:HITI,TSXV:HITI) announced the acquisition of 80 percent of NuLeaf Naturals, a CBD product wellness developer, for an estimated US$31.24 million. The deal includes a three year option clause for High Tide to complete a total acquisition. "As international markets open up and as export regulations evolve, NuLeaf's cGMP-certified facility positions us to take advantage of the global CBD business opportunity," Raj Grover, president and CEO of High Tide, said.
  • Humble & Fume (CSE:HMBL,OTC Pink:HUMBF) released the financial report for its first 2022 fiscal quarter to shareholders and the market. "As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers," Joel Toguri, CEO of Humble, said.

Don't forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Commercially viable scandium deposits are rare, making widespread use of the metal tricky. However, there is indeed opportunity in the space.

Scandium is a critical metal that is as strong as titanium, as light as aluminum and as hard as ceramic.

While it is more abundant than lead, mercury and all the precious metals, there are no pure scandium-producing mines. The rare earth element is often a by-product, produced from refining other metals, including uranium.

Pure scandium metal rarely concentrates at higher grades alongside other metals, making commercially usable scandium deposits very rare. What's more, even when scandium is found at elevated levels, processing it can be difficult, leading to very few stable sources of this critical metal.


Not surprisingly, that means there has been very little adoption of scandium in commercial applications. However, as John Kaiser of Kaiser Research has pointed out several times in the past few years, as well as more recently, that doesn't mean there hasn't been research into how scandium could be used in the future.

"Hundreds of applications (have been) filed, many of them related to alloys with aluminum," he said in an interview with the Investing News Network. "This obscure metal is going to go ballistic in the next few years."

Kaiser made that statement a few years back, and scandium has yet to go ballistic. But he still has hope for the metal, and it could yet have its day in the sun.

Below is an overview of the scandium market. Topics covered include current production, newcomers to the space and the metal's potentially bright future.

Current scandium production

The first known large-scale scandium production was associated with Russian military programs. Details are lost to history, but Russians reportedly alloyed the metal with aluminum to make lightweight MIG fighter parts. Mining at these historic Russian production sites has ceased, but stockpiles of scandium oxide and scandium master alloy remain in Russia. These stockpiles are rumored to be dwindling, but continue to be offered for sale on the market.

Today, most scandium is produced as a by-product during the processing of other ores, such as uranium or rare earths, or recovered from previously processed tailings. As a result, scandium supply can be affected by the supply and demand dynamics of the metals it is produced with. That can make the metal's already tough-to-follow market dynamics even more difficult to understand.

According to the US Geological Survey, scandium-producing countries include China, where it is a by-product of iron ore, rare earths, titanium and zirconium; and the Philippines, where it is a by-product of nickel. Scandium is also produced as a by-product of uranium in Russia, Ukraine and Kazakhstan.

More US production could be on the horizon as well after a push in legislation that encourages the Department of Defense to look into the potential uses of the metal. Environmental and construction permits have been approved for NioCorp's (TSX:NB,OTCQX:NIOBF) polymetallic Elk Creek project with probable reserves estimated to be 36 million tonnes containing 65.7 parts per million scandium.

Scandium resources have been identified in minerals-rich regions across the world, most notably in Australia, where a number of junior mining companies are working to develop scandium deposits in New South Wales. These include Scandium International Mining (TSX:SCY), which controls the Nyngan project; Clean TeQ Holdings (ASX:CLQ,OTCQX:CTEQF), which holds the Sunrise project; and Platina Resources (ASX:PGM,OTC Pink:PTNUF), which is working on the Owendale project.

Scandium price and trading

The US Geological Survey states that the global scandium market is "small relative to most other metals." This is exemplified by global production and consumption, which is only an estimated 15 to 20 metric tons annually.

The US Department of Commerce and the International Trade Commission do not have specific data on trading for the metal. Furthermore, there is no formal buy/sell market today — scandium is not traded on an exchange and there are no terminal or futures markets.

Instead, the metal is traded between private parties, mostly at undisclosed prices and in undisclosed amounts. Therefore, understanding the precise volume of production and cost of scandium is difficult, and independent estimations are more relevant.

Production estimates are based on levels of trader activity and interest, as well as the knowledge that some traders deal in the critical metal from very small operations.

The estimates also include consumers believed to be sourcing their own scandium through small, controlled recovery operations, but don't consider amounts of the metal contained in the master alloy currently being sold from Russian stockpiles.

The scandium opportunity

Analysts expect the global scandium market to grow at a compound annual growth rate of above 11 percent between 2020 and 2025. "The major factors driving the growth of the market studied are the accelerating usage in solid oxide fuel cells, and the rising demand for aluminum-scandium alloys," notes ReportLinker.

Despite the lack of known, stable supply, scientists and engineers have been working hard to develop new products incorporating the metal. Scandium's potential in high-tech applications is well documented. Highlights of the metal's properties include:

  • It can be used in the creation of stronger, corrosion-resistant, heat-tolerant and weldable aluminum alloys for lightweight aircraft and automobiles.
  • Its outstanding electrical properties and heat resistance are valuable for solid oxide fuel cells.
  • It has unique optical properties for high-intensity lamps.

A recent Kaiser Research report on scandium details the wide variety of end uses for scandium now and into the future, as well as where potential supply to meet that demand may originate.

potential scandium oxide supply and demand

Potential scandium oxide supply and demand.

Kaiser Research

As Kaiser has explained, "There's an enormous latent demand for scandium if it ever became available on a primary, scalable basis."

In other words, the only barrier to accessing demand from a new family of high-performance aluminum materials and energy/lighting products is the lack of commercially viable larger-scale scandium production. Interestingly, Kaiser's work highlights two important scandium market events that may "have the potential to launch scandium demand growth over the next decade towards a 1,000 (tonne per annum) market worth US$2 billion."

For one, Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) announced in 2020 that it has developed a route to recovery for scandium at its Sorel-Tracy facility in Quebec, where it produces titanium slag from the Lac Tio iron-titanium deposit. In mid-2021, Rio Tinto began commercial-scale operations at its new scandium oxide production facility.

"The Rio Tinto development is a game changer for the scandium sector," said Kaiser, who believes the increase in scandium production could help boost the sector.

Secondly, Scandium International Mining filed an application in late 2019 for a patent protecting a method for recovering scandium and other metals from the waste streams of copper oxide leaching operations. In mid-2020, the company announced that copper raffinate tests showed its patent-pending process could recover enough scandium to match the supply being added to the market by Rio Tinto.

"Conditions are finally right for scandium to become the ideal lightweighting solution for aluminum," Kaiser said in his note to investors.

This is an updated version of an article originally published by the Investing News Network in 2014.

Don't forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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