All indicators are green for the yellow metal. After rising 19% in 2019, gold should continue to benefit from the macroeconomic and geopolitical environment. The ounce has thus settled well above 1,500 dollars (1,362 euros), against 1,270 dollars a year ago. “The conditions are met for gold to gain another 10% to 15% in the coming months,” said Christophe Moulin, head of multi-asset management at BNP Paribas Asset Management.
But gold is still far from its historical record in September 2011, at $ 1,921 an ounce. “It is possible that this level will occasionally be found in the coming months in the event of strong geopolitical tensions. The announcement came close to $ 1,600 in early January at the announcement of the death of Iranian general Soleimani,” stated Vincent Boy, market analyst at IG.
Gold thus perfectly plays its role as a haven in the event of a crisis. It serves as a shield against geopolitical but also economic uncertainties. It is true that from Iran to Brexit via the trade war between the United States and China, the sources of tension are numerous. “ As events unfold, we can observe occasional peaks and declines in the price of gold. However, the upward trend remains for the coming months, driven by the persistence of a low interest rate environment.
Even more favorable in euros
The primary support for yellow metal prices, interest rates should indeed remain very low in 2020. Because, unlike bonds, gold does not deliver a return. This disadvantage no longer matters in a market where bond interest rates are almost zero, even negative. “The central banks will remain accommodative. This environment of meager interest rates is a constant support factor for gold prices, ”said Christophe Moulin. Not to mention that purchases of physical gold by central banks are continuing, particularly in countries seeking to free themselves from the domination of the dollar, such as India, China, and Russia. The excellent performance of gold prices in recent months has not escaped investors. “The course of gold is even more favorable in euros than in dollars: the ingot even registered a new historical record at 45,770 euros on January 8,” said François de Lassus. The French took the opportunity to return to the market, to buy as to sell. “Some customers who bought during the previous market peak in 2011-2012 took advantage of the surge in prices in euros in recent months to sell a little while generating profits,” said Jean-François Faure