Gold has been one of the most precious and sought-after commodities for centuries. As a safe-haven asset, gold has proven to be a reliable store of value during times of economic uncertainty and volatility. In October 2019, the gold market experienced a surge in demand, which drove up the price of the metal.
The average price for gold in October 2019 was 1.493,04 USD an ounce. The lowest was 1.472,53 USD an ounce while the highest was 1.505,54 USD an ounce. Average gold price in 2019 was $1,393.34.
At the beginning of October, the price of gold was around $1,500 per ounce. By the end of the month, the price had risen to over $1,520 per ounce, marking a significant increase in just a few weeks. This increase in the price of gold was driven by several factors, including a weak US dollar, ongoing trade tensions between the United States and China. Gold prices hit a two-week high on global markets as expectations rise for another rate cut by the Federal Reserve later in the month. The price of gold rose to $1,504.35, its highest level since October 10th. This increase was due to the decline in new orders and shipments of US-made capital goods, indicating a softening in business investment. Zerohedge just put up an article showing the gold charts the past few years during China’s Golden Week period. As the week started today, and given the historical trends I think we can see rebuying next week once China gets back in taking the market higher. Interestingly, the Fed plans repo operations until October 10.
With the US central bank cutting interest rates twice this year, analysts anticipate another cut during the next meeting of policymakers next week. Low interest rates increase the appeal of non-yielding gold as a safer investment during times of economic and political uncertainty.
The uncertainty surrounding Brexit also continues, with British Prime Minister Boris Johnson proposing a general election to resolve the ongoing crisis.
On Wednesday, holdings in the world’s largest gold ETF, the SPDR Gold Trust, dropped by 0.13% from the previous day. Meanwhile, holdings in the world’s largest silver-backed ETF, the iShares Silver Trust, remained unchanged.
The ongoing US-China trade dispute, concerns over global growth, and monetary policy easing have boosted gold prices this year. In addition, the Indian government increased the import duty on gold to 12.5% in its budget, which has impacted retail demand in India, the world’s second-largest consumer of gold.
The US dollar was particularly weak in October 2019, which helped to boost the price of gold. A weak US dollar makes gold more affordable for buyers using other currencies, which leads to increased demand and a higher price. Additionally, the ongoing trade tensions between the US and China contributed to the weakness of the US dollar, as investors became increasingly uncertain about the future of the global economy.
In addition to the trade tensions and weak US dollar, other factors contributed to the rise in gold prices in October 2019. The global economy was facing uncertainty and turbulence, which caused many investors to turn to safe-haven assets like gold. The escalating political and economic turmoil in several countries, including Britain’s Brexit crisis and protests in Hong Kong, further increased demand for gold.
Overall, the gold market in October 2019 was characterized by increased demand and higher prices. The combination of a weak US dollar, ongoing trade tensions, and global economic uncertainty helped to drive up the price of gold, making it an attractive investment option for many investors. With continued uncertainty and instability in the global economy, it is likely that demand for gold will remain high in the months and years to come.