According to John Reade, the Chief Market Strategist at the World Gold Council the demand for gold is set to go up in 2019. All indications show a positive turn for gold. The same factors that affected gold in the previous year will continue to do so in 2019 and any kind of economic downturn might boost demand which in turn will boost the price. This is good news for anyone who is in the gold business and people with money invested in gold be it in bullion or in jewellery will be able to get great prices for their gold when they choose to sell. To bullion dealers like Melbourne bullion company.
Looking back, gold took a downturn in the middle of April and hit $1,160 in mid-August as the US dollar gained strength. The price improved in October as the effects of the U.S. trade war began to trickle through. The price of gold held steady at $1,200 but it could have done more over that last months of the year.
The demand for gold has primarily been driven by China and India, the two countries that have traditionally consumed the most gold produced in the world. Physical gold buyers in China and India are expected to grow as these country’s economies continue to show signs of growth. The demand for gold seems to have grown more in the technology sector as more ground-breaking uses for gold have been discovered in medicine and in electronics. The use of gold in industrial and technological applications is expected to grow in 2019 and beyond as the world becomes more digitally connected.
There has also been a marked increase in the amount of gold that central banks buy. Countries like Russia are buying more gold, so is China, Turkey and other countries. They are doing this to minimize their dependence on the US dollar. The World Gold Council has reported a 8% increase in the gold bought by central banks. All the sources of demand not only allude to gold’s performance at the new year but it underpins gold’s long-term performance. The dollar is still an important driving factor as far as the price of gold is concerned. The dollar will gain strength as the Federal Reservetightens its monetary policy and stocks recover but that seems unlikely to happen in the near future.
If for some reason the US economic growth slows down, and reality sets in after the tax-cuts. Gold could see an actual increase in its price. If trade wars drag on and monetary policies get tighter then investors may look to buy more gold. There are growing concerns of an economic slowdown that could match the 2008 financial crisis.
Given the current market dynamics, now would be a good time to consider gold as an investment. The best way for anyone to make such an investment is through a reputable dealer like the Melbourne bullion company. Gold is a highly liquid assets that can deliver strong returns.