It’s the start of a New Year and hopes are high for the price of gold. Gold investors are hungry to see some action in gold prices after a strong start to 2018 turned into a bearish market, but today’s low prices offer investors tomorrow’s opportunities.
Over at Investing Haven, the predictions for gold prices in 2019 are optimistic. Based on several leading indicators, they predict that gold prices reaching $1300 (USD) in 2019 would be a reasonable expectation. A more bullish outlook predicts that if gold breached a key resistance point at $1375 per ounce, it would unleash a bull rush that would ultimately push gold up to $1550. They’re saying there’s about a 20% chance it will reach $1550, with a 75% probably it will peak at $1375.
With gold prices currently hovering around the $1200 mark, buying gold now is a great opportunity for investors to make a comfortable profit in 2019.
What are the indicators that’s causing many market analysts to predict a good year for gold?
Low Real Rates
Inflation is picking up in the U.S., but a decrease in the value of the dollar suggests that the Fed won’t be hiking interest rates as planned. High real rates (the difference between interest rates and inflation) usually mean your money is better spent in higher-risk investments, as it can grow much faster. Low real rates mean higher risk comes with lower reward, and investors flock to stable assets like gold. Negative real rates, when they happen, can ignite huge price jumps for gold.
Commitment of Traders
Although gold prices haven’t been breaking records recently, the Commitment of Traders (or COT) reveals a very limited downside to gold.
To explain this for novice investors, gold’s COT reports essentially mean that while gold prices haven’t been soaring, gold futures investors aren’t betting on that trend. There’s a historic low in long contracts for gold futures, which means investors aren’t willing to bet on low gold prices beyond the medium term.
Economic Troubles Ahead
Trade tensions had gold investors crossing their fingers for better prices this year, but the headlines never managed to put a dent in the economy. While the stock market had a rough autumn season, the economy itself seems unshakable, with unemployment rates reaching historic lows.
It’s been a long road to recovery since 2008, but many now believe that the U.S. is overdue for a recession, and that could finally push gold prices back up.
All in all, 2019 could be a promising year for gold. Before you invest, make sure you get the latest price of gold and find a gold dealer that offers competitive pricing over spot.
Buying real gold bullion in the form of coins or bars has the lowest risk attached. For investors who trust in the real purchasing power of gold, don’t get involved with ETFs. You can buy the real thing from dealers like Silver Gold Bull with minimal extra expenses.
Invest in gold the right way. Buy gold coins and gold bars without the third-party risks involved in bail-in regimes, fraud, and fund mismanagement.