by SignalFactory · January 30, 2020 | 08:37:47 UTC
Gold
prices could test $1,700 an ounce before the end of the year due to the
combination of central-bank monetary policy and political and economic
uncertainties, Refinitiv GFMS said.
The
consultancy issued the outlook while releasing its annual Gold Survey report
early Thursday in London. In 2019, gold posted its highest annual average in
six years.
And
the rally likely is not over, said Cameron Alexander, manager of
precious-metals research with Refinitiv. The macroeconomic backdrop should
remain supportive for gold, with political and economic uncertainties likely to
lead to stock-market volatility and higher risk aversion, Alexander said.
“Central banks’ monetary policy is likely to remain on the loose
side, with a possibility of at least one interest-rate cut from the U.S. Fed
later in the year, particularly should the U.S. economy show renewed signs of
stagnation,” said Alexander. “While demand from key Asian markets will likely remain
weak this year, ongoing central-bank purchases and renewed investor interest
will lend support for higher gold prices.
“The spike in the price was largely attributed to a pick-up in
investor interest, particularly among the professional investor community,
which was evidenced by positioning on Comex and a surge in inflows into gold
ETPs [exchange-traded products],” Alexander said.
“Renewed interest was driven by an escalation of geopolitical
tensions, increased concerns over the global economic and trade prospects as
well as the gold’s improved price outlook. Furthermore, gold’s appeal was
boosted by a shift among the world’s key central banks towards a more
accommodative monetary policy to support slowing growth and weak inflation.”
Net
managed-money positions jumped by 15%, or 104 metric tons, in the second half
of 2019, Refinitiv said. While backing off from the peak, the 819 tons as of
year-end was still an increase of 362% from the end-of-2018 level. Meanwhile,
ETP investors added 387 tonnes of gold during 2019, with global holdings
reaching a new historical high of over 2,700 tonnes by year-end, Refinitiv
said.
However,
bar and coin retail investment fell by 17% in the second half of 2019,
Refinitiv said. Bar demand in India fell by 53%, hurt by higher import duties
and high prices in the local currency. China, meanwhile, posted a 2% rise in
bar investment during the second half, driven by a pullback in the domestic
equity market and rising trade tensions with the United States. Global coin fabrication
fell by an estimated 17% to 135 tonnes in the latter part of 2019, the
metals-research firm reported.
Gold
consumption by the jewelry sector also declined, with fabrication demand
falling by 17% in the second half of the year, the consultancy reported. This
demand fell in China by 10% amid a slowing economy and higher gold prices.
India’s jewelry demand fell by 36% in the second half of the year.
On the supply side, Refinitiv said environmental concerns and a crackdown on illegal mining led to a fall in gold output during 2019.
All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user.
This website and all information is intended for educational purposes only and does not give financial advice. Signal Factory is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Factory does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Factory is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Factory or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use.
Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered.
While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all.
All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information.
All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way.
The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions.
Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company.
Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results.
Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.
