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Gold Reached Record Breaking Highs In The First Half Of 2019

ByDarshan Shah

Sep 11, 2019 #Business

The first two quarters of 2019 have been good for gold. Experts predicted that the price of gold could only go up. Some were cautiously predicting the price to get to $1,400/ounce by the end of the year, however that price was reached much earlier, by the second quarter of the year. Gold has inched its way to record breaking highs, outperforming a large number of currencies and thus pushing a lot of central banks to increase their gold reserves in order to stem the erosion of their country’s currencies.

How did gold succeed? There are two main reason that gold succeeded in performing as well as it has:

#1. Demand more than supply

The World Gold Council (WGC) reports that demand for gold in the first quarter of 2019 rose higher than anticipated. Central bank buying of the yellow metal rose to a six year high however, the supply and production of around the world remained the same. The increase in demand against the waning supply is one of the reasons that the price of gold went up so high.

#2. Geopolitical and economic difficulties

The U.S stand-off with China over trade tariffs weakened both countries’ economies. China is not only the biggest producer of gold but it is also the biggest consumer of gold. The economic slow down affected not only China but it is also affecting Europe. The heightened uncertainty and tensions has pushed many countries to reinforce their Financial Security by buying more gold for their reserves. If the trade standoff drags on the price of gold will continue to grow. In June, the price had reached the level of $1,424 / ounce

What have the experts been saying?

According to Goldman Sachs, the world economic conditions are favourable for gold. The trade war, U.S President Trump’s reckless behaviour in addressing geopolitical issues have increased investor fears thereby boosting gold demand by almost 5% at the end of the first quarter of 2019.

In the first few months of the year, China increased its gold purchases by 50%. Other countries began repatriating gold from foreign central bank reserves. Notable countries include Russia and Germany who have been buying more gold. There is growth in the number of regular people who are interested in gold.

Paul Tudor James, head of Tudor Investment Corporation believes that the next 12 to 24 months are going to be good for gold. He was one of the experts who were really certain that gold would reach $1,400 and it did. He also predicted that it would rise to $1,700 by the end of the year and it looks like that might happen as well. The global economic slowdown is good for the price of gold. According to the latest economic figures, gold will play an important part in the financial system especially now with China and Russia and even Malaysia are calling for the return of gold-based currency that will weaken the U.S. Dollar’s stance as the global trading currency.

This is indeed a great era and things are changing with modern trends challenging and influencing traditional economies. In an environment where political institutions and ideologies are challenged ordinary people need a reliable currency like gold to ensure their Financial Security. Gold has proven to be eternally valuable and credible as a store of value, world wide.

This article was brought to you by

Melbourne Gold Company

Suite 701, Level 7/ 227 Collins St

Melbourne, VIC 3000


(03) 8678 2085

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