February 11, 2021

While gold pauses, silver takes off

Sprott Monthly Report - February 2021

Gold Holds Above $1,800 Support

Spot gold closed the first trading month of the year at $1,848, down $51 an ounce or -2.67% in January. Gold started the year strong, reaching almost $1,960 before dropping quickly back to its support level above the $1,800 range. The U.S. Senate majority tipping over to the Democrats accelerated the reflation narrative in an already euphoric market. Over the past five years until last fall, there was an extended pronounced equity long-duration outperformance versus short duration. The unwind of such long-lived legacy positions results in furious price moves, as we witnessed in the fall. Despite that, gold is holding above major support of $1,800 and the only meaningful exposure reduction (a <3% decline) was during November’s reflation trade squeeze.

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