The metal dropping to its lowest levels in nearly three months. The decline was primarily due to a strong US dollar and a lack of safe-haven demand as geopolitical tensions subsided. Gold prices in November 2019 have been lackluster in the global market, trading around the 1470-dollar range. Traders appear to be waiting for the outcome of trade talks. Despite the chaos in the precious metals market, gold has risen, with prices at 14.8% higher than the previous year. Meanwhile, silver is trading at 17.10 dollars, up 11% from the previous year.
The average price for gold in November 2019 was 1.472,43 USD an ounce. The lowest was 1.454,28 USD an ounce while the highest was 1.514,06 USD an ounce. Average gold price in 2019 was $1,393.34.
Short-term and Long-term Gold Report: Analysts are divided on the short-term future trend of the gold market due to current economic and market conditions. Some predict stable prices while others anticipate an increase. As for the long-term trend, Thomas Martin, Manager at First Eagle Investment Corporation, believes that gold is a secure method to store value and is mostly used for hedging purposes. He also stated that it is not possible to predict the future price or trend of gold and other asset-backed investments.
Our opinion is that gold prices will inevitably increase in the long term, as seen from the historical rise from 40 dollars in 1960 to nearly 1500 dollars today. The price of gold is currently volatile due to the US-China trade war and the outcome of the US presidential impeachment case and UK elections. Regardless of the outcome, investors hope for stability and growth in the market.
The US dollar continued to rise in November.
reaching a three-month high against a basket of major currencies. This made gold more expensive for buyers using other currencies and reduced demand for the metal. Additionally, tensions between the US and China, which had supported gold prices in previous months, showed signs of easing, further reducing demand for the safe-haven metal.
Gold and silver prices declined in November.
Due to a sustained rally in US equities, rising US Treasury bond yields, and increased investor optimism about a potential US-China trade deal. This weakened demand for precious metals causing a 3.26% decrease in gold prices and 6.10% decrease in silver prices in US dollar terms, finishing the month at $1,463.90 and $17.02 per troy ounce. Despite this recent pullback, gold prices in USD have risen 20% in the past year, and silver prices have seen a similar increase.
In Australia, the 1.87% decline in the local currency helped minimize the decrease in precious metal prices, with gold and silver declining by 1.23% and 4.37% respectively. The metals finished the month trading at AUD 2,166.98 and AUD 25.10 per troy ounce, still up 30% over the past 12 months.
Gold has been range-bound since early October, with the market expected to be supported near the 200-day moving average, currently just above $1,400 per troy ounce. However, the risk of a more significant correction cannot be ruled out.
The pullback in gold was primarily driven by the continued strength in US equities, with the Dow Jones, S&P 500, and NASDAQ hitting multiple all-time highs during November. This has increased investor optimism, with the Bank of America Merrill Lynch Global Fund Manager Survey showing the fastest increase in global growth optimism in 20 years. Investors have also sold out of safe-haven assets like bonds and cash, with cash holdings at six-year lows. The VIX, a widely followed index tracking market expectations of equity market volatility, also saw short bets hit all-time highs, indicating little likelihood of a break-out in volatility.
Despite these factors, there were also several positive developments for gold in November. The Federal Reserve’s decision to hold interest rates steady and the possibility of further rate cuts in the future supported gold prices. Gold also benefited from renewed uncertainty in the global economic outlook as weak economic data from Europe and China increased concerns about a global slowdown.
In conclusion, the decline in gold prices in November 2019 was due to a combination of a strong US dollar and a lack of safe-haven demand, offset by positive developments in the economic outlook and monetary policy. As always, gold prices are influenced by a complex set of factors, and it is important for investors to stay informed about the latest developments in the market.