As 2019 comes to an end and 2020 begins, we believe that:
- Financial and geopolitical uncertainty combined with low interest rates will likely continue supporting gold investment demand
- Net gold purchases by central banks will likely remain robust even if they are lower than the record highs seen in recent quarters
- Momentum and speculative positioning may keep gold price volatility high
- Gold price volatility and expectations of weaker economic growth may result in softer consumer demand near term
- But structural economic reforms in India and China will support demand in the long term.
Note: our comprehensive annual Outlook will be published by mid-January 2020.
Stocks outperformed in 2019 but investors remained cautious
The year 2019 proved eventful for investors. Stocks, especially in the US, continued to reach record highs but not without major pullbacks at various times during the year as economic and geopolitical risks compounded. At the same time, many central banks – the highest level since the global financial crisis – started cutting rates, expanding or implementing quantitative (or quasi-quantitative) easing and, in some instances, doing both. After having moved well above US$1,500/oz during the third quarter, the gold price was up by almost 15% as of the end of November, as investors looked to balance higher stock prices with an increasingly uncertain environment.