While precious metals prices didn’t begin with too much activity at the start of 2019, the market certainly shifted and trended downward throughout 2019.
Gold was seeing relative lows throughout the majority of 2018, and while the first quarter of the year managed to rally from those lows, it was only able to make relatively slight gains throughout the quarter, gaining not even quite 1%.
The year thus far has seen slow economic growth, a softer U.S. dollar, and its fair share of geopolitical issues, and these are most likely the main catalysts behind gold’s ability to keep itself above $1,250 an ounce throughout Q1. In addition to this, the U.S. Federal Reserve put a pause on rate hikes, so investors in gold have regained their interest in the metal’s status as a safe haven.
In spite of the reaction that gold has had toward these factors, prices were nonetheless murky, but a fair proportion of industry insiders predicted that gold was to rise and stay above $1,300.
Silver, on the other hand, had a somewhat turbulent time. While at the end of January it was able to reach a high of $16.04 per ounce, by the end of Q1 it was down by almost 2%.
While the aforementioned slow economic growth, softer U.S. dollar, and geopolitical issues were able to keep gold at a steadily growing rate, it was unable to do much more for silver besides keeping it above the lows seen in 2018.
Q2’s second month got off to a start with interest rates being cut by the Fed by a quarter-point. This took them to a range of 2 to 2.25 percent. This was the first time it had been at this point in over 10 years.
The U.S. dollar rallied after this announcement, sending gold spiraling downwards. Following the news, gold immediately dropped to $1,413.40, but within only 24 hours it recovered to $1,445.10. The second quarter was a good time to invest in gold with a precious metals company, although the low prices were not to last.
Silver managed to stay relatively flat during the year’s second quarter. While it was able to hit a high of $15.41 per ounce towards the end of June, there was ultimately a gain of less than 1% throughout the whole quarter.
While it’s no doubt thanks to geopolitical issues and a softer dollar along with slow economic growth that silver was able to keep above the $14 mark, it was nevertheless not able to make the same gains and increases that gold was able to do throughout the quarter.
The third quarter was an eventful time for the gold market. At the start of the 3rd quarter, gold was trading at $1,383.70 per ounce and continued to grow throughout July. By the beginning of August, it managed to reach $1,445.10 while continuing to pick up momentum throughout the rest of the month.
Once we reached the end of September, gold had slipped down to $1,482.20 from its position of $1,528.5 at the beginning of the month.
Silver saw a similar story, also driven by the gains in the gold market, started the 3 month period of Q3 selling at $15.11 an ounce, and only continued to rise throughout July. Consumers who invested in silver with a precious metals company prior to the third quarter saw a significant increase in value.
By the end of August, silver reached $18.34, while September became somewhat volatile. It started the month at $18.43, managed to climb as high as $19.23, the highest seen since 2016, then slipped back down to $17.62.
The fourth quarter of the year saw gold and silver prices hit a 3 month low. Gold futures for December were down $6.70 an ounce to 1,459.70, while Comex silver prices for December were down $0.245 to $16.765 an ounce.
Both the gold and silver markets saw serious near-term technical damage, as both have experienced bearish downside “breakouts” on the daily bar charts from sideways trading ranges. In the near term, more price pressure is likely, with bleeding likely to stop as gold probably finding strong support at $1,400.00. With regards to silver, it’s likely that price erosion will continue to around the $15.50 level before bottoming out.
With investors and traders not entirely confident in the idea of the U.S. and China is close to signing any kind of trade deal, the week has for the most part seen global equity markets go into rally mode over the idea of a soon to be completed “Phase 1” of the U.S. – China trade agreement.