On September 4, the price of gold climbed to 1,551.83 USD per ounce.
Then, as the two economies began to reach an agreement in negotiations, gold prices fell.
That was also the largest year-on-year increase since 2010, when gold prices rose nearly 30%.
`The main impact on gold prices this year is low global interest rates, amid geopolitical tensions in Europe over Brexit, as well as the US-China trade war,` Stephen Innes, Strategy
Gold trading at Degussa store, Singapore.
Also according to this expert, political and diplomatic instability leads to concerns about a global economic recession.
`Ultimately, the weakening world economy due to the US-China trade war has forced central banks to lower interest rates. This means the risk-free cost of holding gold is lower than US Treasury bonds
Innes believes gold prices will trade between $1,300 and $1,600 per ounce next year, depending on the outcome of trade negotiations and the overall global economic outlook.
Jasper Lo, another veteran gold trader, even predicts gold prices will increase even more.
`The protests in Hong Kong show no signs of ending soon, and that has been seen by investors as one of the international uncertainties. Additionally, both China and India face the problem of
Joshua Rotbart, Founder and CEO of J. Rotbart & Co (Hong Kong), specializing in trading gold and other precious metals, believes that the price of gold will increase to between 1,580 USD and 1,620 USD by the end of 2020, which will increase.
`We believe that financial concerns will continue next year, along with US-China tensions. And on top of that, gold is becoming more scarce. Production and mining are increasingly expensive,`
The trade war has dragged China’s economic growth this year to its slowest level in decades, while Hong Kong suffered its first technical recession in 10 years in the third quarter of 2019, due to civil unrest.
`Increased gold purchases by central banks, especially Russia, China, Türkiye and Poland, reflect governments worrying about their ability to stabilize currencies amid world uncertainty. `Low and even negative interest rates for gold make it even more attractive, as a safe alternative to government bonds,` Mr. Joshua Rotbart said.
Jerry Jrearz, International Sales Director of brokerage company First Asia Merchants Bullion (Hong Kong), also believes that gold prices will continue to increase next year.
According to this expert, layoffs are happening widely in the banking industry worldwide.