Reuters :
Jitters over global growth and a possible pause to US monetary tightening are expected to set gold prices up for gains in 2019, a Reuters poll showed on Tuesday, but the metal will struggle to break above recent highs.
The survey of 36 analysts and traders returned a median forecast for gold to average $1,305 an ounce in 2019, up around 3 per cent from last year’s average and a touch higher than forecast in a similar poll three months ago.
It predicted prices would average $1,350 in 2020 – just below peaks of $1,374.91 in 2016 and $1,366.07 last year.
In 2018, gold saw its first annual decline in three years, with surging stock markets and higher US interest rates offering investors better returns elsewhere, while a stronger US dollar made gold more expensive for non-US buyers.
But the metal has managed a firmer trajectory so far this year, reaching seven-month highs and hovering around the important technical level of $1,300.
“A slowdown in Fed interest (rate) hikes, possibly a weaker or at least not strengthening US dollar, further US stock corrections and ongoing geopolitical instability are building the perfect storm (in favor of gold),” Frederic Panizzutti at MKS said.
Flagging growth in China and elsewhere and a US-China trade dispute have knocked world stock markets from last year’s record highs and raised fears of a broader global slowdown – reviving interest in gold as a safe store of value.
Economists, meanwhile, say the US Federal Reserve will slow the pace of rate rises, and currency strategists polled by Reuters believe a dollar rally is largely over.
Adding to the bullish mood, gold-backed exchange-traded funds have added around 4 million ounces, or 7.6 per cent, to their holdings of the metal since early October. Speculators had also turned positive, with bets on higher prices on the Comex exchange overtaking bets on price falls by mid-December, after which data has been unavailable due to a partial US government shutdown.
“We see gold in a longer-term recovery. The first phase, driven by normalizing sentiment in the futures market, seems to be completed and a short-term consolidation looks likely,” said Julius Baer analyst Carsten Menke.
Jitters over global growth and a possible pause to US monetary tightening are expected to set gold prices up for gains in 2019, a Reuters poll showed on Tuesday, but the metal will struggle to break above recent highs.
The survey of 36 analysts and traders returned a median forecast for gold to average $1,305 an ounce in 2019, up around 3 per cent from last year’s average and a touch higher than forecast in a similar poll three months ago.
It predicted prices would average $1,350 in 2020 – just below peaks of $1,374.91 in 2016 and $1,366.07 last year.
In 2018, gold saw its first annual decline in three years, with surging stock markets and higher US interest rates offering investors better returns elsewhere, while a stronger US dollar made gold more expensive for non-US buyers.
But the metal has managed a firmer trajectory so far this year, reaching seven-month highs and hovering around the important technical level of $1,300.
“A slowdown in Fed interest (rate) hikes, possibly a weaker or at least not strengthening US dollar, further US stock corrections and ongoing geopolitical instability are building the perfect storm (in favor of gold),” Frederic Panizzutti at MKS said.
Flagging growth in China and elsewhere and a US-China trade dispute have knocked world stock markets from last year’s record highs and raised fears of a broader global slowdown – reviving interest in gold as a safe store of value.
Economists, meanwhile, say the US Federal Reserve will slow the pace of rate rises, and currency strategists polled by Reuters believe a dollar rally is largely over.
Adding to the bullish mood, gold-backed exchange-traded funds have added around 4 million ounces, or 7.6 per cent, to their holdings of the metal since early October. Speculators had also turned positive, with bets on higher prices on the Comex exchange overtaking bets on price falls by mid-December, after which data has been unavailable due to a partial US government shutdown.
“We see gold in a longer-term recovery. The first phase, driven by normalizing sentiment in the futures market, seems to be completed and a short-term consolidation looks likely,” said Julius Baer analyst Carsten Menke.
