The year 2018 has seen a solid metal lose much of its shine. Despite the current turmoil in a burgeoning US-China trade war and emerging market economies, the metals like gold which traditionally serve as haven assets have not drawn the expected influx of investment.
Our Predictions for The Future of Gold Prices in 2019
The future trajectory of interest rate hikes is the vital key for the gold markets in 2019. This trajectory is known as the dot pots and where the Federal Reserve perceives long-term interest rates. The currently went higher US interest rates tend to support the dollar and push bond yields up. This move eventually will put pressure on gold rates by extending the opportunity cost of holding non-yielding bullion.
Is it a safe bet?
Gold’s reputation as a ‘safe haven’ investment usually makes it the benchmark with which other volatile stocks are measured. With stocks and shares, property and currencies continuing to falter in the underperforming UK and the broader economy. Due to this, individuals are looking to broaden their investment portfolios and place their money into the physical gold which has continually outperformed all other forms of investment on the market.
The sudden drops in the gold ETFs since the last few weeks are a warning sign. It warns the market that the gold investors are becoming increasingly wary, unconvinced that the gold rates will rebound any time soon.
The RPS Gold Conclusion
Bank of America Merrill Lynch also expects the gold price to climb above $1,300 by the end of 2019 with a forecast of around $1,380 by 2020, a potential upside of up to 13%.
This is excellent news for investors who choose to hold on to their gold, with expert capital economics saying that gold prices are in store for ‘short-term pain, long-term gain’, with things only picking up next year when gold rates rallies to $1,350 an ounce.
“Those who learn to view such volatile situations as opportunities rather than the disasters can make a huge sum of money in these cyclical markets” says a spokesperson from RPS Gold.