Gold On Track For Best Yearly Performance Since 2010

Gold is on pace to post its best yearly gain in nearly a decade, with prices up roughly 15% since the start of 2019. That’s the best performance for the yellow metal since 2010, when prices rose nearly 30%.

Gold has seen significant safe haven buying this year as investors worry over low and negative yields in bond markets. There are also lingering concerns over a potential downturn for equities, which are now in the tenth year of a historic bull market run.

This years’ gains came thanks to the push through the $1,350 level this past summer. That level had been the upper band of a trading range that was in existence for the past six years, since the spring of 2013.

The push through that level was sparked by talk of U.S. interest rate cuts by the Federal Reserve, and once above the resistance level gold continued rising to its eventual yearly high at $1,560.40 an ounce on September 4. That’s the highest close for gold since April 2013.

Gains were solidified by the Federal Reserve’s three interest cuts in 2019, and prices have remained resilient even as the central bank has put further rate cuts on hold.

Gold could face some challenges in the coming year however. Inflation in the U.S. appears to finally be rising, and higher inflation leads to higher interest rates which are bearish for gold prices. We are also seeing global politics stabilize with the recent U.K. elections and the U.S.-China trade deal. That could dull safe haven demand in 2020, leading to lower prices.