Gold run has further to go: WGC

17th January 2020
Resources Rising Stars

The World Gold Council expects gold to record further price gains this year as globally low interest rates and heightened geopolitical uncertainty portend higher investment demand, according to director of investment research Juan Carlos Artigas (reports MiningNews).

The positive outlook comes on the back of gold putting in its best performance since 2010, rising by 18.4% in US-dollar terms last year to end the year at $1519.50/oz. It outperformed major global bond and emerging market stock benchmarks over that period.

The rally continued into the New Year, with the gold price increasing by a further 6% by January 7.

"While we believe that there are various reasons for this move, tensions in the Middle East linked to the US-Iran confrontation ultimately pushed the gold price to an almost seven-year high in early January," Artigas said.

Subsequent comments by US president Donald Trump aimed to ease concerns and pushed the price down to the $1560-$1550/oz-level as of January 10. Yet, gold remains 2.6% higher relative to the end of 2019.

"We expect that investor positioning related to this specific event will likely influence gold's performance in the near term. But over the medium term, broader financial and geopolitical uncertainty and developments in monetary policy will play a more important role," Artigas said.


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