Gold At 6 Month High At $1,300 and All Time Record Highs In Australian Dollars Over $1,870
- Gold over 6-month high at $1,300 on global slowdown fears- Bullion surges 5% in December and consolidates on gains this week- Gold surges to all time record highs in Australian dollars ($1,871)- Safe haven demand for safe havens as risk assets sold- Apple's poor outlook sees stocks fall; Markets now wagering on Fed rate cut- "2019 is already getting off to a volatile start and we expect to see the political and economic uncertainty of 2018 continue and deepen," GoldCore told Bloomberg News
Gold price in Australian dollars - 1 year (GoldCore)
We are bullish on gold in this quarter and in 2019 as the market backdrop looks very supportive indeed. For the first time in many years, I am positive on the gold price in the short and medium term - meaning this quarter and the next year or two.
However, we are concerned that gold may have become overbought from a trading perspective in the very short term.
Thus, in the very short term we could see a bit of a pullback. A retracement of some 50% of the recent gains should be expected. A shallow pullback should be greeted as an opportunity to acquire gold at these still under valued levels.
Investors who are allocating to gold for the first time, would be best to dollar, pound or euro cost average into physical gold by buying 50% in the coming days, then 25% in the next month or so and then the remaining 25% withing three to six months. Not having an exposure to physical gold makes investors exposed to major financial and systemic risk.
2019 is already getting off to a volatile start and we expect to see the political and economic uncertainty of 2018 continue and deepen as we told Bloomberg this week.
Gold will continue to act as a hedge in 2019 as it did in 2018.
Gold's hedging and safe haven credentials were clearly seen again in recent months - especially for UK, EU and Australian investors. Gold gained 2.7% and 3.8% in euros and pounds (see tables & charts). Gold rose 8.5% in Australian dollars in 2018 as the Australian economy slowed down and property and stock markets in Australia fell.
Trade wars, Brexit, EU contagion and the risk of the global debt bubble bursting remain real risks that will likely impact risk assets in 2018, as we discussed in our just released and well received Outlook 2019 Podcast.
We believe risk assets will continue to under perform, while gold (and silver) outperform again in 2019. The record nominal highs seen in Australian dollars this week will be seen in pounds, euros, dollars and other currencies in the coming year or two - possibly as soon as late 2019 or 2020.
As ever, it is prudent to hope for the best but be prepared for less benign financial scenarios by diversification and owning precious metals in the safest ways possible.
Wishing you and yours a healthy and prosperous 2019.
News and Commentary
Gold Bursts Above $1,300 as Slowdown Tremors Spur New Year Rally (Bloomberg.com)
Gold climbs to over 6-month peak on global slowdown fears (Reuters.com)
House passes bill to end government shutdown without border wall money (CNBC.com)
Markets now wagering on Fed rate cut, China-U.S. trade talks calm nerves (Reuters.com)
Apple Woes Send Stocks Swooning as Treasuries Jump (Bloomberg.com)
Source: Bloomberg
Market's Obstacles Are Both Macro and Micro - GoldCore via Bloomberg (Bloomberg.com)
Safe Havens Are Back: Yen, Gold and Bonds Are Bought as Risk Assets Sold (Bloomberg.com)
Gold Soars Above $1,300; Nikkei, JGB Yields Tumble As Rout Goes Global (ZeroHedge.com)
Why Apple's sales warning has rattled the currency markets (MoneyWeek.com)
The Bad Stuff That the Stock Market Worried About Is Starting to Happen (Bloomberg.com)
Gold Prices (LBMA PM)
03 Jan: USD 1,287.95, GBP 1,024.05 & EUR 1,132.62 per ounce02 Jan: USD 1,287.20, GBP 1,014.44 & EUR 1,125.27 per ounce31 Dec: USD 1,281.65, GBP 1,005.45 & EUR 1,120.03 per ounce28 Dec: USD 1,277.25, GBP 1,009.16 & EUR 1,114.91 per ounce27 Dec: USD 1,271.10, GBP 1,006.20 & EUR 1,115.26 per ounce24 Dec: USD 1,261.25, GBP 996.26 & EUR 1,105.23 per ounce21 Dec: USD 1,257.60, GBP 993.76 & EUR 1,101.53 per ounce
Silver Prices (LBMA)
03 Jan: USD 15.53, GBP 12.37 & EUR 13.70 per ounce02 Jan: USD 15.44, GBP 12.19 & EUR 13.51 per ounce31 Dec: USD 15.47, GBP 12.11 & EUR 13.51 per ounce28 Dec: USD 15.30, GBP 12.05 & EUR 13.34 per ounce27 Dec: USD 15.06, GBP 11.92 & EUR 13.22 per ounce24 Dec: USD 14.68, GBP 11.60 & EUR 12.88 per ounce21 Dec: USD 14.69, GBP 11.59 & EUR 12.86 per ounce