There is renewed optimism that 2019 could be a great year for gold. After a multi year gold bear market from the its peak in 2011 when gold prices hit an all time high just shy of $2000 an ounce, followed by a long consolidation period, several factors are pointing to the possibility of higher gold prices going forward.
Firstly, are the economic growth concerns over the Sino-U.S. trade standoff. Many analysts worry that a prolonged standoff between the U.S. and China will dramatically slow down growth in the global economy. A slow down in the worldwide economy could fuel a rush to gold as a safe haven for investors.
In Europe the European Central Bank is much expected to stay the course with its monetary policy for 2019 with growing threats to the euro zone economy stemming from trade protectionism. This sentiment is also worrisome for other major global economic players such as Japan.
In the US, the Fed has indicated a slowing down of its rate hikes, while at the same time leaving itself open to being flexible with its stance.
Lastly, another major theme that could support higher gold prices comes from the gold mining industry itself. Many gold miners are producing gold at a loss at the current price levels. Major gold mining companies will have to consider mergers and acquisitions as they run out of reserves in the ground. These issues are sure to put pressure on gold production and available supply.
Given the level of uncertainty in the global economy, the upside potential for gold in 2019 looks quite promising.
