NEW YORK, NY – Gold prices will continue to advance as the year ends. The rising market momentum, a weaker US dollar and the remaining wariness over the US-China trade deal are the reasons given for the yellow metal’s good performance.
After months of trading downwards, gold prices are starting to catch up with the momentum that has caused other commodities to perform better.
Gold prices have pushed past the $1,500 range from December 23 to 26. The previous week saw February Comex gold settling at $1,518.10. The precious metal was up by 0.24% or by $3.70. It finished the period on an all-time high and reached a level it hasn’t hit since November 4. The gold market also showed its best performance in more than 16 weeks. The price of silver also went up to $18 an ounce.
Investors are crediting a weakened dollar for pushing gold further up as traders liquidate their safe-haven hedges in the currency. But others are claiming the ongoing uncertainty and questions surrounding the China-US trade deal has given the metal a boost.
There are also doubts that the gold rally can be sustained and that it might just be the usual position-squaring that happens at the end of the year.
Everything seems to go back to the trade agreement though. The weaker dollar is reportedly due to the hope that there will finally be a resolution to the long-standing trade issues between the US and China.
Gold’s future is also closely linked to emerging markets and to China. Any drop in the value of the dollar usually results in an increase in interest in the metal, especially among Chinese and Indian consumers. The two countries have traditionally looked at gold as an investment and savings medium.
Regardless of the reasons or the fears prompting it, daily swing charts indicate that gold is trending upwards. This was proven last Friday when buyers made short work of the previous session’s accomplishments.
Buyers are not expecting a change in gold’s movement any time soon. However, there is still a chance it will turn downside for a 50% to 61.8% correction.
Gold is slated to end the year enjoying its first significant gain since September. It increased by 18% on its year to date. It’s also set to post its finest year in almost a decade. This is an amazing accomplishment considering how much pressure gold prices were in for most of the fourth quarter.