The price of gold is still under pressure in the short term. On Friday he had fallen from $ 1,475 to $ 1,460, and that relatively jerky. Because at 14:30 clock there was the US labor market data, which surprised all observers totally positive with significantly more newly created positions. The stock markets and thus the riskier assets rose, the gold price fell. With currently $ 1,463, the market is still under the influence of this very good US data.
Central banks provide purchasing pressure
Are these perhaps good entry levels in gold? Consider, for example, that the central banks in the almost completed year 2018 have bought wild gold (more than 49 years ago), and that they will probably continue this buying spree in 2020 as well. In the first half of this year alone, the gold purchases of the central banks even exceeded the value of the previous year. Of course, this demand is fundamentally responsible for upward pressure in the gold price. But consider the following statements. Investing.com is currently quoting ABN AMRO analyst Georgette Boele:
Despite the $ 100 decline from the annual high, “investors are still massively positioned for higher gold prices. The net long position on the futures markets is extreme and the ETF positioning is at a high level. These positions are currently above the market and prevent prices from rising significantly, as any price increase will be used to realize profits from existing positions. “
Gold price well above $ 1,500 next year?
Results of a survey of banks in Germany were released today, showing how the gold price will develop next year. If one believes the average of 14 forecasts of these banks, then the gold price will land at $ 1,570, which is $ 107 higher than currently. The range extends from $ 1,500 (for example from Berenberg Bank) to $ 1,700 through Helaba.
What could have a positive effect on the price of gold over one year? Perhaps quite fundamentally the negative interest environment and the constantly high demand of the central banks, so our very simplified and abbreviated comment on it. In the short term, much will depend on what the next steps in the trade war are. Ultimately, Donald Trump needs positive statements from China too, because for him the current situation on the US stock market is the yardstick for his alleged political success. Will Trump continue to push the stock markets in the short term with positive hints, but they are not sustainable?
This could help stocks in the short term, and put the price of gold on the way up in the short term. But in terms of weeks and months, does gold have a better perspective if the real problems of the trade war become more apparent? Can gold then rise above $ 1,500 supported by negative interest rates and central bank demand? In any case, one must keep an eye on the mood around the trade war in the short term. Any negative message helps the gold price as a supposed haven of security! And you saw it last Friday. The US labor market data provided a strong move in gold. Economic data can also do a lot!