On the backdrop of US-China economic struggle, the dollar is rallying the currency market. Despite the dollar dominance the gold prices have stayed firm throughout the course and expected to do the same in near future.
In the meantime, the dollar has pushed back the Sterling and Euro from new October highs and edged the Chinese Yuan. Beijing’s move to ease monetary policy was rebounded with bank lending and backed towards last week’s 17-month lows.
Gold prices today hit $1228 in the London trade, matching silver’s 0.7% gain for the week at $14.68. They have outpaced the platinum and now edging back below $838. According to the recent data from the mining industry’s World Gold Council, the gold ETF trust-fund holdings last month shrank to their lowest since August 2017.
“Economic, financial, and geopolitical market developments have mostly tended to be bearish for precious metals. In particular, the US Dollar gained a boost from additional US monetary tightening and rising market consensus and the windfall of the tax reform.” – RPS Gold adds their valuable observations.
Meanwhile, the trade war between China and the US saw a run emerge on emerging markets, that again boosted the US Dollar as well as US equities. Some of the headwinds that have weighed on gold this year are expected to persist in the coming months including “a resilient Dollar, high bond yields and subdued inflation situations slowly turn positive for gold into 2019.
The RPS Conclusion
Looking for a steady rise in the rates of gold to average $1310 per ounce next year, the chief trigger will be a gradual asset rotation from the equities back into gold by top investors. Observing the current market conditions, the Bank of America has proclaimed that the gold prices are going to soar in the next 12 months. Investing in gold can pay dearly in 2019 with an expected surge in the gold prices.