Gold Price Forecast 2019

Is gold a good investment in 2019? It's a question many investors will be asking themselves. Below are some of the driving factors of gold's price in 2019, along with predictions on what could be next.

The World Gold Council has reported that global demand for investment gold rose by 4% in 2018, with central banks buying at their highest for 50 years. Worldwide growth has slowed, with the US-China trade war having a widespread impact on the larger global economy. As it continues to drag on the perceived risk increases, negatively affecting all countries.

The IMF predicts that the global economy will grow by 3.5% for 2019, down from 3.7% in 2018. With Italy entering a recession recently, and Turkey likely to follow suit, Forbes and Bloomberg are among many reporting a risk of recessions across the world.

Alongside the US/China trade dispute, the Eurozone has suffered growth slowdown, and the continued Brexit negotiations have also impacted the price of gold here in the UK. The Euro has had the worst of it; with its weaknesses exposed further by these external economic impacts.

Photo (L to R): President Trump, President Xi, Prime Minister May, and President Draghi (ECB)

With a Brexit stalemate looking set to drag on past the March 29th deadline the European Union waits to see if Britain will leave in a financially secure way, or crash out with no-deal.

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Update: As of March, the OECD (Organisation for Economic Co-operation and Development) have reported that growth is down even more than forecast. The Eurozone will see reduced growth of just 1%, and global growth has been downgraded to just 3.3%. In response the Bank of England and Federal Reserve have both hinted that there will be no interest rate rises for 2019.

Gold has seen demand increase in South-East Asia and the UK by up to 12%. Mining companies Newmont and Barrick Gold have both made acquisitions recently, signalling their continued commitment and interest in the gold mining industry.

Currency fluctuations and turbulence over Brexit has seen the price of gold rise to as high as £1032 per ounce, and as low as £972, as investors continue to worry over the future relationship of Britain to the EU.

Gold is expected to maintain its value this year as Brexit seems set to limp on past March 29th, but should the right circumstances arise – the turbulence of a no-deal Brexit – then it could climb to heights not seen since 2011.

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Update 06/08/19: As suggested in our March update, Brexit fears have significantly increased the price of gold recently. Gold has not only reached the 2011 peak, but has now passed it – setting new Sterling records of £1,213.72.

The gains have been driven by Dollar movement – which has reached its own six-year highs recently, but is still $400 per ounce from the all-time high – and has then been boosted by a recent devaluation in the Pound.

Global economic conditions have been unsettled in recent months; the US-China trade war has not only dragged on, but escalated further. Trump announced a new 10% to be placed on $300 billion of Chinese goods, which will come into effect on September 1st. China has responded by letting the Yuan devalue to less than 7 against the Dollar. Analysts worry that the trade war has no end in sight, if a resolution is possible at all, and the lost revenue is weighing heavily on markets.

President Trump is also becoming infamous for his unpredictable nature when it comes to foreign policy. Trump’s Twitter account has become something of diplomatic battleground, with enemies and friends made in a matter of minutes. Hostilities with Iran, China, Russia and North Korea have all been increasing recently, and each time Trump directs his attention toward one of them, markets have the potential to shift.

Economic figures from Europe show growth is slowing down, or stagnating in some cases. Recession is on people’s minds across Europe, and UK figures have also suggested a technical recession is imminent.

Here in the UK, Brexit remains the driving economic factor for the Pound. New Prime Minister Boris Johnson has increased the chances of a no-deal Brexit significantly. Analysts have been warning the impact of no-deal will be significant, and rebel Tory MPs working with opposition parties are openly discussing a no-confidence vote against Johnson to remove him and block Brexit.

This political uncertainty and chaos has seen the Pound lose 8% since May and, whatever happens in the lead up to the Brexit deadline on October 31st, analysts predict the Pound will lose more value.

As the chart above demonstrates, gold prices have been increasing steadily for the past three months, a clear trend upwards. The conditions for further gains are apparent, and each of the above topics could push gold much higher. If gold nears its record in Dollars, while the Pound devalues due to Brexit, the gains could be significant. Throw in a tanker war in the Gulf, an escalating trade war with China, and/or increasing hostilities with North Korea or Russia, and perhaps new records could be achieved in Dollars before the end of the year.

Click to see our past gold price forecasts.