Investors worldwide will continue to seek gold in 2019 as a safe haven against inflation and other financial market pressures, according to a recently released report from the World Gold Council.
Impacting the price of gold and investors seeking refuge in the precious metal will be instability in the financial markets, monetary policy and the U.S. dollar and economic reform, according to the WGC analysis.
“While European growth has recovered from the aftermath of the sovereign debt crisis, it has failed to reach the level of the U.S. economy, making it more vulnerable to shocks,” according to the report.
The price of gold see-sawed in 2018 as the U.S. dollar strengthened and the Federal Reserve raised interested rates several times. According to Kitco.com, the closing London PM spot price for the precious metal per troy ounce hit a low of $1,178.40 on Aug. 17 to a high of $1,354.95 on Jan. 25.
While the WGC market analysis suggests investment risk will remain high, gold’s upside could be affected by higher U.S. interest rates and a strong U.S. dollar.
Emerging markets, especially those in China and India, account for 70 percent of total consumer demand for gold. Between 2018 and 2019, Indian’s economy is expected to grow 7.5 percent, “outpacing most global economies and showing resilience in geopolitical uncertainty,” according to the WGC report.
The World Gold Council reports that global demand for gold reached 964.3 metric tons during the third quarter of 2018, 6.2 metric tonnes higher than the same period in 2017.
Stronger gold buying was exercised by central banks adding to their national reserves. A 13 percent rise in consumer demand for the yellow precious metal helped offset large selloffs of gold from exchange-traded funds, according to the WGC.