Gold has had a great month in December, breaking past resistance at $1,280, and it has enough momentum to carry through to the next year according to the https://goldrate.com/.
A Kitco survey found that investors are confident about gold prices pushing past the highly optimistic value of $1,500 an ounce by the end of 2019. The survey also found that only 7% of investors believe that gold prices will sustain price levels of around $1,300 an ounce.
The newfound investor confidence in gold shouldn’t come as a surprise. The US Federal Reserve is poised to tighten its monetary policies by increasing the interest rates two more times next year. When you combine this with the partial shutdown of the US government, you’re looking at a recipe for disaster… for the stock market that is.
It seems that it’s time for gold to finally shine amid slumping economic growth. Here’s why:
US Government Shutdown Will Boost Gold Prices
Donald Trump threatens to continue the partial shutdown of the government well into the year 2019 until the Democrats accept his demands to build a wall along the border to Mexico. Both Democrats and Republicans have locked horns over their opposing policies, and as they do so, the global market threatens to come to a grinding halt, inevitably supporting the bullion.
Weakening US Dollar Boosts the Value of Gold
The US Federal Reserve gets spooked at the slightest hints of a weakening US dollar, prompting them to increase the interest rates in hopes of improving the economy. This isn’t exactly happening because the US dollar is heavily tied to several complex external factors that fall beyond the control of any single entity, least of which is the US Federal Reserve.
You have the tumultuous trade wars between the US and China, with both countries imposing tariffs on each other, thus putting pressure on the gold to climb higher.
Lucrative Opportunities for Smaller Investors
Countries around the world are trying to stimulate their domestic markets to increase the demand for gold by using lucrative incentives. A good example is the Dubai Shopping Festival (DSF), where more than 300 outlets will reward their customers as they purchase jewelry, giving them a chance to win over 32kg of gold.
Meanwhile in India, online retailers are advertising the ‘one cent gold’ policy which allows shoppers to purchase gold for as little as one rupee. Buyers will be eligible for deliveries once they have accumulated at least 1 gram weight of gold.
Precious Metals Market on an Upwards Trajectory
The precious metals market in general stands to gain by recent market changes. Palladium surged by 20% this year trading at $1,259.00 per ounce, with growth expected to continue throughout the next year.
The growing momentum for palladium is fuelled in part by dwindling global supply and increasing demand as automobile companies are forced by government regulations to curb the release of toxic gases in the atmosphere.