Gold Demand in 2020 to be Driven by Market Risk and Economic Growth

SEATTLE (Scrap Monster):  The interplay between market risk and economic growth will drive gold demand in 2020, says the latest report published by the World Gold Council (WGC). Gold had risen by 18.4% in UD dollar terms in 2019, recording its best ever performance in almost a decade.

According to the report, gold managed to outperform major global bond and emerging market stock benchmarks in 2019. Also, it reached record highs in almost all major currencies of the world except the US Dollar and Swiss Franc. The year recorded strong inflows into gold-backed ETFs. For instance, SPDR Gold Shares registered a growth of 19.3% over the previous year.

WGC expects the upward trend to continue in 2020, as it finds many of the global dynamics still supportive for gold. The gold investment demand may peak, mainly on account of persisting financial and geopolitical risks and impending interest rate cuts. Also, the net gold purchases by world central banks are expected to remain robust. At the same time, it foresees elevated gold price volatility.

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The Council sees increased exposure to safe-haven assets like gold, even in the midst of high stock prices on account of low interest rate levels.