Is a Gold Bull Run on its way????, page-4

Global uncertainty and economic slowdown see goldshine and the rally is expected to continue

RachelPupazzoni

12hrs ago (2^nd January 2020)

Extract from Article

"Outlookfor the yellow metal in 2020

Making money out of money isn't easythese days — with the RBA cash rate at 0.75 per cent, term deposits aren'tdelivering the returns investors once relied on.

Profits were sought in equity marketsin 2019, with the ASX rising more than 20 per cent over the course of the year.

However, JP Morgan global marketstrategist Kerry Craig said that's unlikely to continue.

"The outlook for earnings growthis quite muted, that does translate into quite weak equity returns, notnegative, but much lower than we've
experienced in 2019," he told ABCNews.

While gold is down about 5 per centfrom its mid-year high, the political turmoil of the US-China tradenegotiations, Brexit and Hong Kong saw prices rise about 18 per cent overall in2019.

Always a winner in times of economic uncertainty, gold looks set to continue its forward march in 2020.

"Low/negative rates make a casefor holding gold as a risk diversifier given slowing growth and traderisks," UBS analysts wrote in a 2020 outlook note.

The Commonwealth Bank expects to seefurther upside, with gold prices going as high as US$1,600 an ounce — atcurrent exchange rates that's more than $2,300.

CBA's director of mining and energycommodities research Vivek Dhar said the main driver for gold prices over thelong term is US yields.

"We are currently forecastingthe US Federal Reserve to cut US interest rates by 50 basis points nextyear," he said.

"That should push long-term USreal yields lower, therefore supporting higher gold prices."

Anancient commodity goes digital

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He argues gold is a worthwhile assetclass to invest in above many others.

"While some argue gold has noplace in a portfolio because it doesn't yield [return an income stream], theymiss that when compared to Australian shares, property and term deposits — witheach including dividends, rent and interest respectively — gold and silver haveeasily outperformed all three over the last 15 years in capital appreciationand preservation alone."

The Perth Mint launched its own digital gold in 2019.

"Our aim is to make goldaccessible to as many people in as many places as we possibly can," ThePerth Mint's chief executive Richard Hayes told ABC News.

The Reserve Bank is widely tipped tocut interest rates again in early February, which is likely to see the goldprice push higher again.

"Low interest rates reduce theappeal of interest-bearing securities," explained Mr Dhar.

"These securities compete forcapital with gold. Therefore, in times of falling interest rates, gold looksmore attractive and is generally worth investing in."

Buying gold could be a popular itemon new year's resolution lists, as global interest rates continue to fall anduncertainty continues."

DYOR