Gold price scores a 6% rise in august 2019.

Gold prices reached a six-year high of $1,500 per ounce as investors seek refuge in low-risk assets due to concerns about the global economy. As tensions between the US and China heighten the fear of a full-scale trade war, investors have turned to gold, a traditional safe haven asset, leading to a 17% increase in the metal’s value this year.

The average price for gold in August 2019 was 1.498,81 USD an ounce. The lowest was 1.410,47 USD an ounce while the highest was 1.542,86 USD an ounce. Average gold price in 2019 was $1,393.34.

Gold prices continue to soar as uncertainty dominates the global economy. The U.S.-China trade tensions and a possible Federal Reserve interest rate cut have driven investors towards safe-haven assets, with gold being one of the most popular choices. According to the latest Commodity Markets Outlook, the World Bank’s Precious Metals Price Index is projected to increase by 2.6% in 2019, with gold leading the way. The precious metal has already seen a significant increase since its trough in August 2018, reaching a high of $1,340 per troy ounce in early June of this year.

Gold has been supported by a number of factors.

including expectations of a Federal Reserve interest rate cut and strong demand from emerging market central banks. In the first quarter of 2019, gold demand from central banks, particularly China, India, Turkey, and Russia, increased by 68% compared to the previous year.

As the probability of a federal funds rate cut by the end of the year has spiked to 98% in early June, investors have flocked to gold, viewing it as a hedge against economic uncertainty. The continued U.S.-China trade tensions have added to the market volatility, with gold prices reaching new highs as a result.

Moreover, the recent interest rate cuts in New Zealand, India, and Thailand, and weak German industrial production figures have added to the concerns about the global economy. This has resulted in a rise in demand for other safe haven assets such as US Treasuries, causing yields to fall to a near record low of 2.145%. In some cases, yields have even turned negative, as investors are willing to pay to park their money in perceived safe assets.

Donald Trump has also added pressure on the US Federal Reserve to reduce interest rates, which has further intensified the demand for safe haven assets such as gold. Some analysts believe that, in a future economic downturn, US Treasuries could also have negative yields, making gold an even more attractive option for investors.

Joachim Fels, an economic advisor, managing director and global economic advisor based in the Newport Beach office, stated that the negative yield phenomenon, where creditors pay debtors for taking their money, is already becoming common in developed markets outside of the US. He believes that US Treasuries, considered by many as the ultimate safe haven besides gold, may be no exception in the future.

Gold has long been considered a safe-haven asset during times of economic turmoil, and the current market conditions have once again proven its worth. Investors are advised to keep a close eye on developments in the global economy, as any changes could have a significant impact on gold prices in the coming months.





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