Gold prices continued to rise in September as investors sought refuge in safe haven assets amid global economic uncertainty. The precious metal reached a new six-year high, trading at over $1,500 an ounce, with gains of 17% so far this year.
The average price for gold in September 2019 was 1.510,12 USD an ounce. The lowest was 1.485,55 USD an ounce while the highest was 1.552,53 USD an ounce. Average gold price in 2019 was $1,393.34.
Gold saw another strong performance in August, reaching its best levels since 2013 at $1,560 an ounce. In this article, we will be taking a look at the outlook for September, analyzing the key levels to watch, and examining how our previous trade has been doing.
Tensions between the United States and China, weak German industrial production figures, and interest rate cuts in several countries around the world contributed to the growing sense of instability and fueled demand for low-risk investments. The yield on 30-year US treasuries also fell to its lowest level in over three years.
What was driving the price of gold in August?
During August, there were several factors driving the price of gold higher. The ongoing trade tensions between the US and China and the threat of tariffs were the primary contributors. Additionally, the talk of an inverted yield curve in the US and the threat of an economic slowdown raised investor concerns, leading them to seek safe assets like gold.
The Federal Reserve dropped interest rates in the US for the first time in ten years at the end of July, and expectations are for further cuts in the rest of 2019. This is traditionally seen as putting pressure on the US dollar and lifting gold, although the strong US dollar is still present. Despite this, a cut in rates may make gold more attractive to investors.
Important levels to watch in September.
The August high of $1,555 is the most immediate level to watch on the upside. Beyond that, the 2013 high of $1,600 and the $1,700 level are also key. On the downside, the $1,475 low seen during August and $1,400 are important levels to keep an eye on.
Previous trade and outlook for September.
Our previous trade was bought at $1,513, and it’s currently up a bit. We may look at adjusting our position, but we’ll come back to this in more detail later. For September, it’s important to keep an eye on the key levels mentioned above and also consider any developments in the ongoing trade tensions and the US interest rate outlook.
In addition, increased pressure from US President Donald Trump for the Federal Reserve to reduce interest rates further boosted demand for gold. Analysts noted that US treasuries, traditionally seen as a safe haven asset, may also face negative yields in the future, similar to government bonds in other developed markets.
In conclusion, gold saw a strong performance in August due to various factors, including trade tensions and investor concerns about the economy. The outlook for September will be shaped by the key levels mentioned above and any further developments in these areas. As always, if you have a different opinion on where gold prices will go, feel free to leave a comment below. We value your feedback.
Overall, gold’s status as a safe haven asset made it an attractive option for investors looking to weather the current economic storm. With continued uncertainty in the global economy, the trend of increased demand for gold is expected to continue in the coming months.