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Gold will continue to shine in 2019

TVC:GOLD   CFDs on Gold (US$ / OZ)
Gold finished off the year on a firm footing and could be poised for an even more vigorous rally in the months to come. The yellow metal closed at six-month highs above $1,280 in December and looks set to develop its ascent against the backdrop of the ongoing turbulence in the global financial markets. The widespread dollar weakness seen towards the end of 2018 contributed immensely to a spectacular recovery in gold prices from a low of $1,160 registered in August. By the way, December was the best month for the metal since June 2016.

As for the market outlook for 2019, gold demand will likely continue to pick up as the greenback is set to further lose its appeal. Trump’s trade tensions with China may yet shake up markets in general and the dollar in particular. By the way, investors around the globe fear that some of the biggest and most dangerous risks in 2019 will come from Washington, where the ugly political landscape will serve as a source of volatility and uncertainty. In turn, such a combination suggests that market participants will continue to prefer gold over the dollar.

Given the fears of further sell-off in equities and the prospects for a more ‘dovish’ Fed, gold may become the key safe haven for investors who become more and more disappointed in the dollar and the US Administration policy.

From a technical perspective, the precious metal is trading close to the key resistance at $1,300. A break above this barrier will further brighten the technical outlook for gold with the nest target at $1,1350. It doesn’t mean that the potential way north will be straightforward and smooth, but investors will likely use the ‘buy the dip’ strategy.
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