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Gold barrels into 2019

Growth concerns spur demand for haven.

Gold is closing 2018 on a strong note, with haven demand in the ascendant amid volatile trading in global equities, rising concern about the economic outlook and a drawn-out government shutdown in the US.

Spot bullion is holding near a six-month high after topping $1 280 an ounce, and the metal is set for the best monthly gain in almost two years. December’s rally has pared an annual decline, the first full-year loss since 2015.

Read: This billionaire has put half his net worth into gold

Gold gained ground this quarter as global equities plunged and doubts stacked up among some investors about the pace of global growth in 2019. The climb has been aided by a weakening of the dollar in December amid expectations that the US Federal Reserve will dial back the pace of rate increases next year. That has helped to boost holdings in gold-backed exchange-traded funds.

Source: Bloomberg

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“For gold prices, I think there is upside to be seen in 2019,” Jingyi Pan, market strategist at IG Asia Pte, told Bloomberg TV on Monday, citing prospects for fewer tightening moves from the US central bank. “It does look like one where we will see a slackening of expectations in Fed hikes.”

Spot gold hit $1 282.81 an ounce on Friday (December 28), the highest price since June, and is up 4.8% this month, according to Bloomberg generic pricing. It traded 0.1% higher at $1 282.31 an ounce at 10am in London.

Prices held their ground even after US President Donald Trump struck an upbeat tone on his trade dispute with China, one of the lingering threats to growth going into 2019. Trump and Chinese counterpart Xi Jinping spoke at length by phone Saturday, with each expressing satisfaction.

A bullish breakout will take prices toward $1 309 in the current term, according to Benjamin Lu, an analyst at Phillip Futures Pte. Haven demand will “remain vigorous” in the first quarter on economic and geopolitical concerns, he said.

Spot price up

Gold’s spot price recently rose above the 200-day moving average, and the 50-day moving average may be on course to do the same in the coming weeks.

Adding to the bulls’ case, data showed that manufacturing in Asia’s top economy shrank. China’s Purchasing Managers Index fell to 49.4 in December, lower than expected and below the level of 50 that signals contraction.

Among other precious metals, silver for immediate delivery rose 0.2% to $15.4144 an ounce, the highest level since August. A rally of more than 8% this month has eroded an annual drop. Platinum is set for a full-year fall, while palladium traded just below a record hit earlier this month.

© 2018 Bloomberg L.P

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With the world under SERIOUS financial issues. Hold on buy gold.

You might end up buying High and selling Low.

The Dollar is the new Gold.

I see this massive base pattern carved out by the USD price of gold since 2013, with the major resistance, or neckline at $1370. Technicians know that “we only later know the fundamental reasons for the technical setup we see at the moment”. This base pattern in the dollar price of gold tells us something significant. The same pattern of equal proportions formed between 1997 and 2003, and led to a 485% increase in the price of gold.

So, what is this pattern in the price of gold telling us at the moment? What I read in it, is that the “Austrian Money Supply”, also called True Money Supply, will rise relative to the demand for it. In other words – the USA M2 money supply, in terms of the Dollar Index, will explode upwards. This can only be the result of Fed intervention. This implies that tapering will come to an abrupt end, or much worse, another round of QE is on the cards.

Anyway, this will be the result of another leg down on the US Indices. The target on the SP500 is 2100 by the way. That is a decline of a further 16% to bring the total decline to 30%.

The base pattern in the price of gold tells us that the Fed is about to panic. The price of gold indicates the level of indigestion of Mr. Jerome Powell, the Fed Chairman.

The adage is true – a picture does speak a thousand words.

Gold should have a brilliant 2019 as it starts the next leg in a long term bull market are 5 years of “treading water”. Given global uncertainty and lack of growth it’s got to be the safe bet for 2019 and beyond.

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