Since the start of 2019, gold price went on a rampage to reach an euphoric high of USD1440 per ounce on 19 July 2019. This was a remarkable high of 11% increase since the beginning of the year. Of course this was still way off the peak of USD1900 per ounce seen in 2011, but current form of gold price reflected the resilience of the yellow metal.
What actually fuelled the surge in gold price? Many analysts could not really pinpoint the real cause but two factors could have caused gold price to become bullish in recent months.
Drivers for gold price rally
Firstly, the global trade war and the risk of a no-deal Brexit had increased the level of uncertainties in the financial market. Although most people would agree that the current situation does not reflect a recession, the global growth outlook remains pretty challenging.
Long seen as a safe haven, gold is often regarded as the asset to hold in times of uncertainties. In fact, gold price went on a rampage bull form in the period of The Great Financial Crisis to reach a peak of USD1,900 per ounce in 2011. The euphoria in gold was driven by the chaos in the financial markets and this fuelled the charge in the gold price.
Will gold price smash to another new high? Probably yes, because the world has not seen another alternative safe haven for financial assets. In 2016, the crash of China stock market, Brexit and the US Presidential Election saw gold price surging from USD1100 to USD1300 per ounce within a year. So it appears to me that gold price is absolutely capable of staging another magnificent run. It is only a matter of time.
In 2018, US stock market suffered a couple of bloodbaths in …Read more