COVID impact

The oil, gold, stocks and real estate markets have been gloomy in 2020, due to Covid-19. The year 2021 could be also be languorous in the first half. Most nations would have vaccinated about 30 to 50 per cent of their populations by mid-2021. We can then expect some normalcy in markets.

Oil prices which commenced at $64 per barrel at the beginning of 2020, dropped to $40 per barrel, due to cessation of economic activities, during the lockdowns. Prices should stabilise at around $45 to 50 per barrel in 2021, as factories work to full capacities.

Gold prices increased sharply from 1,390 per ounce in 2019, to $1,775 per ounce in 2020, due to uncertainties in investment opportunities like the stock market and real estate. Gold was considered a safe haven by the rich, in an uncertain economic situation. Gold prices will remain steady around $1700 per ounce in 2021 also.

The stock markets have danced bullishly in the last quarter of 2020, with the discoveries of the vaccines. If the vaccines deliver, expect the rejoicing in stocks to continue in 2021. The real estate markets should also gather some momentum by the third quarter of 2021.

It is useful when markets blossom, for they generate jobs, prosperity and optimism.

The behaviour of the markets in 2021, will principally be determined by two factors. First, the effectiveness of the vaccines to halt the spread of Covid-19. Second, the speed of the governments to inoculate their populations expeditiously.

Rajendra Aneja
Mumbai, India