That’s Why 2019 Can Be a Strong Year for Gold Fans

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Given the uncertainties in the economy and the financial world, the gold price has risen in recent months — and the trend could continue in 2019.

The economy is weakening, the stock markets are shaking — and the gold price is starting to pick up noticeably after a long time. There are some indications that this will remain the case in the coming year.

September 2018 may well be remembered by friends of gold investing for a long time to come. Because this month marks a turnaround in the financial markets, which could affect the coming year for a long time yet.

By the end of September, everything on the financial markets had been going well for years. This means that share prices on the world’s major stock exchanges are increasingly fluctuating, but overall they are still up. By contrast, the gold price was almost continuously under pressure in the first few months of this year.

But then came the turnaround: since the beginning of September, the stock market is hardly talked about stability anymore. On the contrary, it is downhill, and so violent, that the bear market has since been proclaimed for various sectors.

At the same time, however, there was a turnaround in the price of gold, in the opposite direction: the precious metal has risen by more than 5 percent since early September alone. Meanwhile, gold is trading at nearly $1280 an ounce again. December, the news service Bloomberg reports, could bring the strongest rise in gold prices in nearly two years. At the same time, the prices of the vast majority of gold mining stocks rose sharply, and, as is often the case, much stronger than the gold price itself.

By comparison, the broad US stock index S & P 500 lost about 15 percent in value over the past four months.

Of course, this is good news for gold fans: their favored investment will finally live up to its reputation as a “safe haven” in troubled times. Because the reasons that led to the slump on the stock markets, it is also that gave the gold price its sudden boost:

  • Worldwide sluggish economic growth that is already raising concerns about a potential recession;
  • Declining corporate profits and row-by-row corporate executives, who have to warn of dull prospects for the future;
  • Various areas of tension, which additionally create uncertainty in the further development of the financial markets, from the trade conflict between the US and China over the chaotic development in Brexit to the fierce oil price and the disputes between the European Union and Italy over its future state budget.

What is crucial for investors, however, is also looking to the future in terms of the gold price optimistic. Because, as most financial experts and observers agree, the scenario of unrest and uncertainty should not change much in the financial markets for the time being.

Author: Marko Vidrih

Image via Shutterstock

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