Gold Price Soars in 2019 – Can This Continue?

Gold Price Soars in 2019 – Can This Continue?

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In this video we’re going to catch up
with the price of gold and find out just why it’s been such a strong performer in
recent months. Hello I’m David Jones from Capital.com and I thought this would be
a good opportunity to take a look at the price of gold in more depth. We last
looked at it in mid-December, and I was saying back then it could be one of the
more interesting markets to watch in 2019. Since then, in just the last six
weeks, we’ve seen the price rise by around about $90. So we’re seeing a
continued recovery for the price of gold And it started this year really
strong as well. So first of all let’s just take a look at why the price of
gold has performed so well in recent months. Let’s take a look at some of the
numbers for gold. So over the last 12 months – this is all to the end of January
2019 – the performance is not that impressive. The price of gold slipped by
one and a half percent but if you look what stock markets did over the last 12
months, clearly they had been under some pressure. But we had seen a falling gold
price compared to where it was in January 2018. But things really have
turned around since the summer of 2018. So in the last six months the price of
gold is up 8% and just in the last month.. so since the end of December 2018 the
price has risen by 3%. So we see continued ongoing strength in the gold
price. So what are the reasons for this? The easy answer is a weaker US dollar. So
the price of gold moves opposite usually to the way the US dollar is going. So a
strong US dollar. And we saw that from April of 2018 puts pressure on the gold
price. In recent months the US dollar has been weaker. So that has lifted the price
of gold. But it’s not just US dollar driven. We’ve also had stock market
uncertainty, for example in the last three months of 2018, we saw plenty of
volatility for stock markets. Traditionally in times
of trouble gold is seen as something of a safe haven for investors cash.Then on
top of that we’ve got wider economic worries, you know. Coming into 2019
there’s concerns about the global economy slowing down, there’s still the
threat of trade wars between – for example – the US and China so all of this
uncertainty, it has been a something of the perfect storm almost coupled with
the weaker US dollar. And that’s why we’ve seen the gold price lifted so
sharply. And then finally, probably not as important I don’t think, as the first two
reasons, but rising inflation. So if we saw inflation, maybe creep up in the year
ahead, again, traditionally gold is seen as something that’s a hedge against
inflation. So something to park your cash in. And if inflation increases, we’d
expect the price of gold to go up. So three.. all three of these factors, to one
extent or another, have really driven the price of gold higher over the last six
months and made for such a positive start to 2019. So we have had what we
could say is.. it’s almost a perfect storm for the gold price and that’s why we’ve
seen it lifted about a $160 higher than the lows we saw back
in August. But where next? What are the big levels to watch out for, if it starts
to sell-off and what’s a possible medium-term target for the rest of this
year? Let’s take a look at the charts. Let’s take a look at the last twelve
months, or so, for the gold price. So this is the beginning of 2018. It was starting
strong but was pretty much sideways all the way through till April and then we
saw that strength for the US dollar come back after having a really poor
performance in 2017. We saw US dollar strength return from about April of 2018
and this clearly put pressure on the price. Gold was trading just above $1360 an ounce but by August of 2018 had slid as
low as $1160 and we can see the trend here is down. So the price of gold
suffered, you know, a sizeable sell-off, a $200 move in about
four-four and a half months for the gold price. But then things started to change. So from October 2018 we saw the price start to recover after this period of
going sideways for a couple of months. It broke above the trend line and started
trading higher up through $1225. Take a look at what happened next – and
here’s the recovery off those August lows, to where we are at the end of
January. So from going from hitting $1160 in August 2018, we’re trading at $1322. So
pretty much the highest levels since May of 2018. That recovery is still very much
intact. I mean it has got overextended, clearly, over the last six weeks or so,
but momentum is still on the side of the gold price. Even if we had a sell-off
from here, there’s lots of support running from the $1200 area, the mid
November lows, through to $1240 and where the trendline comes in at $1230. So gold
at the moment, at least, could stand a significant sell-off from where it is.
And that recovery would still very much be intact. So if we’re looking at
longer-term targets I think the obvious one is for a run back up to these old
highs, just shy of what $1370 from the beginning
of 2018. So assuming this trends going to continue, we’re not going to get there
in a straight line, you know. But for now at least, people looking at this trend
would view a sell-off back to the mid $1200’s as a buying opportunity and I
think it’s only if we lose the $1225 area, does it start to look as if the
recovery in gold is over. But I think 2019 it’s gonna be an interesting year
for this market given the size of the recovery we’ve seen over the last six
months and the uncertainty that we have in stock markets and the wider global
economy. So in the short time you could say it is certainly overextended but for
now at least it does still have plenty of momentum
behind that move. Even if it starts to sell off from here – $50-60 – there’s still
plenty of support and that recovery from those August lows remains very much
intact. So I think it is gonna be still one of the markets to watch in 2019,
particularly when you consider the ongoing political and economic
uncertainty that we still have around the world. We’ll start wrapping things up there as usual. If you have any questions or a
different view, leave us a message in the comments down below, I do read all of
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trading platform. But we’ll wrap things up there, so from me David Jones and capital.com good luck with your trading!

34 comments

  1. Sir recommend some best economics book to know about situation what is the factors that affects financial market?

  2. Decent analysis thank you. But i have to state that the only way to trade gold is to see what the COT reports depicts what is supposedly happening. Central banks off loading long positions and slowly building shorts imho.

  3. dollar now is stronger then in january 2018.

    i remember gold was then about 36000. (euro) it was exchange 1,25 dollar = 1 euro.

    today its 37000 euro and

    1,13 dollar = 1 euro…

  4. The time for gold is now. The time for silver is now. Physical gold and silver should be part of everyone’s portfolio!!!!

  5. tthe reason im in for gold.

    gold in past like twice happend.

    gold rose more then 400% in years ofcourse and every time it gets to peak it falls about 40 % (its called correction )

    for example in 2002 gold was about 10000 dollar kg. in 2012 more then 43000 dollar.

    then it went down (correction) i say it had his correction now it only go up next 5 years. here i make attachment

  6. The main reason now is change of FED policy. Central banks are major influencers of forex and PM markets. They are very cautios about raising rates naow, maybe December was the last time of rate hike….

  7. Gold really gained in value now if we compare it with year ago. In EURO it was sold at more or less the same price during 2018 and only now it has risen alot.

  8. Hi I m from India my name is prakash even I m bullish in gold but last night 2 lot 1330.2 I sold by bid which is I forgot to remove. Can any chance to any correction or at what level I put my stop loss . Current market is moving near 1345 ..

    Please suggest

    And give direction so I can minimize my loss

    Thanks

  9. Not to be rude, but on so tired of this talk about gold going up. People have been saying it's going to skyrocket and it doesn't.

  10. Trade the UBER IPO with zero comissions, no transaction fees and the tightest spreads on our app here http://bit.ly/2VNREQY, or on the web platfotm here http://bit.ly/2JrwQbF

  11. u need to stop holding your nuts on gold its gonna GO up big time once north k and Russia get in the picture gold will soar

  12. Gold and Silver will continue to go up and up and up. Or you can have crap bankers paper printed by the MEGA TON? It's a no brainier.

  13. I just heard gold will be 100 trillion usd. The USD WILL BE GOLD BACKED. The price of gold will be frozen.

  14. Would someone lend me a $
    1000000 Dollars?
    So I can buy gold with the money and get a return on it?
    I,d even give your million back. But give you an extra 10percent off the return profit.

  15. Hi I have a large quantity of 1 ounce gold coins would you sell them now and wait for the price to come back down then buy more or do you think gold is going to continue to rise

  16. so youre saying right around the time of the US midterms is when public confidence in the economy started to slide and gold started to go on the rise? interesting.

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