Figures from the BEGOS rankings of commodities show that, for 2019, gold has been the third-best performing asset – behind the S&P 500 stock market and oil.

At $1,474 per ounce, gold has gained just over 14.5% during 2019. This puts it ahead of bonds, copper, silver, the Swiss Franc, and the Euro.

Last year – specifically in Dollar terms – the price of gold actually declined year-on-year; down 1.7% versus 2017. The size of the growth in the gold price this year goes some way to explaining the very strong demand experienced during the summer month this year, with tensions between the United States and China at their highest.

Since then, the price of gold has tailed off; falling from near $1,600 to the mid $1,400s where it resides at present. Growing optimism about a trade deal between America and China has strengthened investor resolve and given them confidence to bet on the stock markets, but for all the promises from Presidents Trump and Xi, many are getting frustrated at the long-running dispute and the impact it has had on supply chains and businesses across the world.

The gold price in US Dollars per ounce for the past month.

As MoneyWeek pointed out in a recent article of theirs, gold is in an unfortunate position where stocks are doing well, which is a risk-on position, but so too is the US Dollar, which is risk-off. Ordinarily the two should not occur at the same time, and this indecision is keeping gold prices trapped for the time being.

Precious metal specialists Heraeus had more to add in their latest precious metal bulletin too. The German refining group pointed out that in years where gold had made gains, December prices had ended the month down.

Explaining this, Heraeus said: “If the first part of a US-China trade deal is agreed before additional tariffs are levied on 15 December, this would likely see gold sell off. This fits with gold’s typical seasonal pattern which is for weakness into the middle of December followed by a rally in the last few trading days that continues into the first quarter of the following year.”

The expectation from Heraeus and other industry experts is continued strong demand for gold and other precious metals in 2020. The United States is experiencing a slowdown in its GDP growth, and the yield curve has already inverted once this year. The curve is moving that way again presently, which itself is a symptom of an incoming recession or at least an economic contraction. The major US markets such as the Dow and the S&P 500 already lost out on Monday due to weak manufacturing data – a symptom of the hindrance that is the trade war’s disruption.

It is the US economy and the US Dollar that have together halted gold from reaching record-breaking levels. If things take a turn for the worst and that resistance falls away, then gold could have an even stronger year in 2020. Fed interest rate cuts amidst the ongoing trade war and the looming US Presidential Election would be an unpredictable environment, and investors tend to turn to safe havens when things get hectic and inconsistent.