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.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.42% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2021 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Telerade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Telerade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.