Global economic growth continues to be week despite some signs of recovery. The outlook for 2020 by OECD was recently trimmed to 2.9% with major world economies continue slowdown in a year to come.
Trade tensions between United States and China fueled by geopolitical risks retracting world trade. Central banks throughout the globe tend to lower interest rates or al least likely to maintain it at low levels. Government bonds such as US 10-year Treasuries as alternative safe heaven assets are underperforming inflation with low or even negative yields.
While risks of a global downturn are still rattling world markets investors are searching an alternative low-risk instruments to park excessive savings.
Gold is respected as such alternative. In 2019 its spot price is up by 13.8% up to now. Major investment banks see gold prices further up for 2020. Goldman Sachs, UBS looking for prices to climb at $1,600 an ounce next year. Morgan Stanley targets $1,511/toz. as an average price for 2020. According to Reuters poll conducted mid-October median forecast spot gold will average $1,537 an ounce in 2020.
The World bank late October renewed its forecast for average gold spot price to $1,470 per ounce, up from $1,360.
So, a range of $1,500 to $1,600 an ounce is likely the target for bullion price next year.
Gold reached a historical record in 2011 at $1,920 per ounce as the Federal Reserve bought more than $2-trillion of debt to stimulate the US economy.
The gold options market today saw $1.75-million in block trades betting the precious metal could almost triple in more than a year, surpassing the record.
However, the bright forecast could be offset by US-China trade deal. If the deal is actually signed, the risks of further trade wars will recede sending bullion prices sideways.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
Indiscriminate reliance on illustrative or informational materials may lead to losses.
© 2000-2020. All rights reserved.
This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at firstname.lastname@example.org.