Gold: an expert Forecast to 2019

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Less aggressive monetary policy will benefit the gold in 2019
The most successful period for gold in the past year was the time from 23 January to 19 April 2018. The precious metal tested the annual peaks at $1369,40 per Troy ounce, more than gold to these vertices in this year have not risen. At least one year fell on August 15 and $1167,10. The result of the 2018 gold ends near $1272,50 on the wave of investor demand for assets in “safe haven”.
Waiting for 2019 to gold mixed. Among the risk factors stated the following:
– the behavior of the U.S. dollar;
– low need for gold in manufacturing sector;
– low prevalence now of gold as an investment tool.
Factors support, in turn, also look convincing:
– gold is a protective asset. It is expected that 2019 will be a crisis time for the world’s capital markets, defense mechanisms against possible losses, investors not so much, and gold is one of the main;
– point demand for physical gold in China and India;
– robust demand for gold from global Central banks, which form their “safety cushion”.
The basic rate in the prediction of the behavior of gold for next year is still on the aspect of “safe haven”. In conditions of market turbulence and some political uncertainty – “shutdown” in the U.S., distrust of the White house to the actions of the Federal reserve – the market will buy the precious metal more active. This is due to the fact that in periods of market pitching gold retains its value. Besides the US, there are other critical moments in world space is a Brexit with it a higher uncertainty, sanctions against Iran, the aspect of North Korea and its nuclear weapons, the trade war between the US and China, which is temporarily paused.
In 2019 the fed will raise the interest rate only twice, instead of the previously announced three. It is positive for the gold market, which is very sensitive to the dynamics of the US dollar. The precious metal is difficult to compete with assets that generate income in times of rising rates. Now it is obvious that in the new year the fed will be very careful with interest rates and forecasts the first increase will take place not before spring. Less aggressive US monetary policy is a plus for gold prices.
Expectations for gold prices in 2019: between $1200-1400 per ounce, the first half of the year with high probability will be in the range of $1250-1350 per Troy ounce.
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Anna Bodrova,
Senior analyst at information-analytical center,
Alpari