Gold Outlook

As we look ahead, we expect that the interplay between market risk and economic growth will drive gold demand in 2020

The first half of 2019 proved quite eventful for financial markets. Stocks retraced their Q4 2018 losses by the end of April only to pullback again in May.

Against the backdrop of turbulent markets, geopolitical risk and Fed rates hikes, gold closed 2018 on a strong note, outperforming most global asset classes.

As we look ahead, we expect that the interplay between market risk and economic growth in 2019 will drive gold demand. And we explore key trends that will influence its price performance.

Gold rose by more than 4% in the first few months of 2018, only to finish June down by the same amount. Gold’s price momentum and investor positioning in derivatives markets accelerated this descent, but we believe that there may be reasons to be optimistic. Key macroeconomic trends developing in the second half of 2018 may spur investor demand and opportunistic buying.

In 2017, investors added gold to their portfolios as incomes increased, uncertainty loomed, and gold’s positive price momentum continued. As 2018 begins we explore four key market trends and their implications for gold.

In 2016, investors around the world returned in large numbers to the gold market, as a combination of macroeconomic drivers and pent up demand kept interest in gold high. As we start the new year, there are some concerns that US dollar strength may limit gold’s appeal.