It made me laugh a little bit, Bart. Maybe it shouldn't have. It said notwithstanding, and then some fairly significant things. But putting those aside, it sounds like there's-- the outlook for commodities is looking pretty healthy.
- We think so. Certainly, based on what we're seeing in Asia, China in particular, many of their economic indicators are pretty much back to pre-COVID levels. Certainly, there are challenges on the export side. And that's mainly because the Western economies remain quite subdued. But, so we have Asia doing fairly well.
At the same time, we expect a pretty robust fiscal stimulus coming up. And that, I think, includes the United States. And that is notwithstanding what the Georgia Senate races end up to be, I think there is really no choice for the Americans. What will, I think, be difficult to predict the exact size of the stimulus. But we will see stimulus.
And the third leg that's helping commodities here, on the demand side, is, of course, monetary policy. We're going to see zero interest rates for, I think, for the foreseeable future, certainly for the next few years to come. We're probably going to see an announcement as early as tomorrow that the US Federal Reserve is going even more dovish, as it reduces duration of its balance sheet.
And we're looking probably for as much as $2.8, maybe $3 trillion of additional liquidity being added into the financial system by major central banks within the G10. And of course, we have a bit of a supply constraint. So all of those things, I think, point to a fairly decent performance for the commodity market.
- I want to dig into each of the commodity. That's funny. I'm hearing more about that supply restrained. I mean, one thing that's happening, of course, as you know, there's not a lot, as much happening right now for many companies, because of, obviously, COVID. They're not able to get as much of that commodity going. But let's talk about-- I want to talk about gold, silver, and oil, if I could. So let's start with gold. Give me a litle more details on where you see gold going from here?
- Well, think gold goes north of $2,000. Again, I think it's going to be a bumpy road by. But at the same time, this time next year, we're looking, I think, of $2,100 and above. And here, very similar reasons to our optimism. One, we think real interest rates are going to be negative. We're expecting some inflation pressure, other inflation expectations to move higher, as we normalize the global economy. But central banks will keep rates low. And that will include along the yield curve. So we're not going to have a very steep yield curve at all.
So we will not see any incentive to get rid of gold. The curves are going to keep gold involved, so to speak. And at the same time, we're going to have pretty strong demand for investment. We've seen stellar demand for investment for both gold and silver. We think that continues. Many reasons for that-- a hedge against inflation, a hedge against monetary debasement. With all that fiscal spending will come massive amounts of debt.
Canada is certainly one of those countries that is using printing to fund these expenditures. And the United States and others are, of course, no different. The concern by some investors is that over time, this ultimately will debase currency, and certainly will make a fixed income instruments not perform well in the real interest rate terms. So investors will do well, will likely buy it. That includes ETFs. We think central banks continue to buy next year as well.
And since the curves don't allow gold really to move into the physical market, given the interest rate structures, as they did previously, we are going to be constrained on the supply side. Again, we had a big decline in both silver and gold in 2020, because of COVID. There'll be some rebound. But as we move over time, the rate at which gold supply rises, the physical gold, will be much lower than money supply. And we also see the US dollar weaken over the longer term. And that is another reason why we're quite optimistic on gold.
- There's certainly a lot more pluses in that column than minuses. And if I could, I wouldn't mind going to silver. You mentioned, supply constraint would be something that would be hitting gold, as well as silver. And silver is more of an industrial play, isn't it?
- Absolutely. So silver benefits on two fronts here. It benefits from being a monetary metal, like gold. So it benefits for all the macro and monetary developments that we were just discussing. But 60% of silver demand is very much industrial. So as the global industrial activity starts to normalize, we're going to use more silver for electronics. We're going to do-- things like capacitors, circuit boards, and such. We're going to use more silver for catalysts, for chemicals.
And there's a lot of pent up demand we're seeing around the world, where catalysts will have to be replaced as the demand moves higher for manufactured products. And I think we are going to see an awful lot of infrastructure spending. And that'll be a global phenomena. And now, it will include the United States. We're not clear how much exactly, given potentially a divided government in the US, will be spent. But I think there will be massive amounts of money being directed towards decarbonizing the economy.
And silver is one metal that will benefit a great deal. One, it is very intensively used in electric vehicles and all circuit boards. So if you're electrifying and reducing CO2 footprint, you're using a lot of silver. Plus, there is the solar panel story, where silver is very much used as an input in manufacturing of those. And if we're-- make the assumption that we are greening the economy, and renewables such as solar is going to be one of the cornerstones of that, that means you're going to use a lot more silver over time.
It's not going to happen immediately. Still, that represents a small amount. But as we move forward, that's going to happen. And we're looking at a deficit this year in 2020, next year, and for the next couple of years, mainly because of investment and growing industrial demand, and lackluster supply side. Ahead of that, we could easily see investors take positions that tighten that market even further.
- Interesting about the changes, the structural demand for silver. I've only got about 30 seconds, Bart. Can you tell me, just your thesis for oil right now?
- Well oil, we're looking at around $50 for both Brent and WTI, with WTI a little lower in the second half. Ultimately, we think that oil demand rebounds by about six million barrels a day, from a decline of nine million barrels this year. But the good news here is that even though we will continue to have spare capacity, mainly OPEC, they are very disciplined. And they're not going to swamp the market. In fact, they are committing in Q1 to keeping a deficit of about 1 million barrels a day through Q1. And we'll probably see modest deficits for the balance of the year, as they try to unwind some of that excess inventory.
We don't see much more of an upside than that, mainly because OPEC will want to have that oil used up. So they will match demand, ultimately. But after 2022, it could be quite tricky, where there could be a lot of constraints on the supply side.
- Bart, we're going to leave it there. Thanks so much for joining us. Great outlook, and we'll talk to you again in the upcoming year.
- It was my pleasure. Thank you.