In 2018, gold has come a long way and gained interest of investors, ordinary people, as well as leading world powers. The precious metal is considered a reliable long-term investment building stronger financial security and better future.
RESULTS OF 2018:
Gold showed stable growth, the cost per ounce has reached $1,282 by the end of the year.
Over the past month, the cost of gold has risen by 5%.
Demand for gold has increased, countries built up their gold reserves.
The global gold reserves are running out.
Given the results of 2018, gold retained the position of a globally recognized metal – an asset which preserves and accumulates revenues.
Purchasing gold in 2018 is as profitable as it was five or ten years ago!
Gold price chart for 2018
Does gold indeed grow in price?
Gold had a rough patch throughout the year. Summing up the first six months, financial analysts noted a downward trend and a decline in gold prices. Despite the negative dynamics, market experts never doubted the triumphant return of gold, suggesting taking advantage of the situation and buy gold, ensuring its recovery and restoration of strong positions.
Since November 2018, costs per ounce of gold began to rise.
Given that analysts predict a turbulent year ahead, financial gurus strongly recommend paying attention to the main protective tool – gold.
The primary criterion for the evaluation of the asset is the steady price increase. In the long run, despite the price hike of 2018, the cost of an ounce of gold is on the rise.
For example, in 2007, an ounce of gold cost $700, by the end of 2018, its cost rose to $1,300. In December 2018 alone, the cost increased by 5%.
Gold price growth chart over the past 10 years
Gold prices are rising.
Rise in gold prices boosts the demand for gold. That’s why the central banks of various countries actively replenished their gold reserves in 2018, expanding opportunities for gold mining.
- India increased its reserve by 8,16 tons of gold.
- Hungary increased gold reserves tenfold – 31,5 tons.
- Russia ranked first in the world in terms of gold purchases. Throughout 2018, the country purchased 92,2 tons of gold.
Gold vs crude oil?
Both investment and “black” gold are key assets in the market. Crude oil and gold influence the economy and determine the stability of countries. Who won the battle for supremacy last year?
Over the past ten years, a record-high drop in crude oil prices was registered in November 2018. Analysts attribute the sharp price fall to an increase in fuel stocks.
Brent crude oil chart per year:
It turns out that gold won. Regardless of the fluctuations, gold prices are about to soar.
The paradox is that no matter how closely crude oil and gold are interrelated, they have completely different effects. For example, the rise in crude oil prices provokes a worsening economic situation, yet at the same time, the rise in the price of gold helps overcoming this situation.
You cannot buy an oil well for yourself, but you can buy a certain amount of gold for your own financial security. This must be done right away, before the global crisis occurs!
What helps gold grow?
At the end of 2018, gold started afresh due to market volatility, unstable economic situation and intensification of the trade war between the United States and China. The policy of the Federal Reserve System constantly fueled interest in gold. Statements of the current Chair of the Federal Reserve Jerome Powell adjusted gold prices.
According to financial analysts, the Fed will continue to support gold in 2019, pursuing a strict policy of raising interest rates.
Inflation, unemployment and depreciation of money serve as the main reasons for the rise in gold prices. While the purchasing power of national currencies is declining, the value of gold increases.
The fear of ending up unemployed, inability to pay off debts and panic over losing real estate make people think about preserving their savings.
Gold comes to their rescue!
The demand for gold is growing.
According to the World Gold Council (WGC), the number of gold buyers is increasing in India and China. Residents of countries with rapidly developing economies actively invest in gold accounting for half of the total global gold demand.
How much gold is in the world?
Gold is both scarce commodity and end product, that’s why it is so highly valued.
Gold was once actively mined in South Africa, which allowed the country to occupy leading positions in the ranking of the most advanced and stable countries in Africa. Now the annual production of gold is steadily declining. Experts believe that only six thousand tons of gold are in the country’s subsoil.
Australia faces the same future. According to experts of the research company MinEx Consulting, the level of gold production on the green continent will decline by 2057. By that time, virtually all the country’s gold mines will be emptied. Currently, Australian reserves account for thousand tons of gold.
In Russia, the amount of gold mined in the existing deposits is reduced by 2% per year, and 25% of the mined gold are lost due to old equipment and inefficient methods.
Gold reserves on Earth become scarce year after year.
Only doubled or tripled investments in geological research and production can stop this process. Countries that invest huge amounts of money in the development of new deposits and ensure modern equipment will succeed.
SNL Metals & Mining reports the peak of gold production in the coming year, although the global rate of gold mining activities will decrease by one third until 2025.
What awaits gold in 2019?
The main questions that concern those who care about financial security are:
- Will the cost of an ounce of gold increase?
- What role will the Fed play and what will happen to interest rates?
- How will the dollar behave; will it put pressure on gold?
- How can I increase my gold reserves?
We will answer these questions soon. In the meantime, check out the forecast for 2019 on our site!