• Gold rose above $1,500 an ounce on Tuesday as lingering fears of recession and equity market highs drove investor demand.
Spot gold was up nearly 1% in thin trade at $1,499.48 per ounce by 01:40 p.m. ET (1840 GMT), its highest since Nov. 5, while U.S. gold futures settled up 1.1% at $1,504.80.
"We are still not seeing good (U.S.) numbers come out of the business investment side. We are wholly dependent on consumer spending. But when consumer spending starts to flag a bit, then the economy could really start to slow down more noticeably," Edward Meir, analyst at ED&F Man Capital Markets, said.
• Gold in 2020
Gold is sneakily turning bullish as we approach year end. Gold has withstood a wrath of trade optimism that has made many investors question the need for safe-havens. The 2020 outlook for gold is starting to look very bullish as strong central bank demand is firmly in place, the dollar could continuing falling in the first half of the year, the Fed is on hold and the next move is still likely to be further accommodation as deflationary pressures seem likely to return, and we will unlikely see a broader trade deal between the world’s two largest economies until after the 2020 Presidential election.
• Key Islamic Nations Ditching the Dollar
After the Islamic Summit concluded in Malaysia last week, Iran, Malaysia, Turkey and Qatar announced they are exploring trading in gold. This comes in the wake of hefty sanctions by the U.S. on Iran. Fearing future penalties, the Malaysian PM said,
I have suggested that we re-visit the idea of trading using the gold dinar and barter trade among us. We are seriously looking into this and we hope that we will be able to find a mechanism to put it into effect.
• Hoarding is on the Rise
Russia is leading the trend in gold hoarding. Russian mining operations have gone up a gear this year. They mined 185 tons of gold from January to July in 2019. Compared to 2018, this is an increase of roughly 18%. Consequently, Russia’s total gold reserve is up to $548 billion.
Quite clearly, Russia seems to be moving away from the U.S. dollar, but it is not alone. Everyone from the super-rich to the central banks seems to be on a gold buying and hoarding spree.
Reference: Reuters, Marketpulse, CNN
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