Traders bullish as gold price is poised for strongest growth in almost a decade, having gained 15 per cent amid Hong Kong protests, US-China trade war

Beijing (Dec 23)  The gold price is poised for its strongest annual growth in almost a decade, having gained more than 15 per cent in 2019.

Traders widely expect gold to rally further next year as global economic and political uncertainties encourage investors to seek safety in the yellow metal.

The gold price hit a high for the year of US$1,551.83 per ounce on September 4, when uncertainty in the markets, caused mainly by the US-China trade war, was at its most intense.

Hong Kong shoppers take a break from gold as prices spike amid trade war

As the two biggest economies later began to reach agreement in their trade talks, the gold price fell. It stood at US$1,479.61 an ounce on Sunday (December 22), which is 15.4 per cent higher than it was at the end of 2018.

That is the biggest annual jump in gold since 2010, when it shot up by almost 30 per cent. The returns generated by gold investment this year have beaten Hong Kong’s benchmark Hang Seng Index, which has climbed almost 8 per cent.

“The main driver of the gold price this year has been lower global interest rates amid heightened geopolitical tension in Europe over Brexit, as well as the trade war between the US and China,” said Stephen Innes, chief Asia market strategist of AXI Trader.

The political and diplomatic turmoil led to fears of a global recession, which has driven investors to buy into gold and drive the price up, Innes said.

SouthChinaPost