This article was prepared by Macquarie’s Commodities Strategists for LME Week 2019.
24 October 2019
In 2019, geopolitical conditions have provided a near-perfect backdrop for the gold market. We experienced weak but positive global growth, subdued interest rates and heightened geopolitical tensions – in US-China trade and the Middle East too. All of which have lifted gold's price to heights not seen since 2013.
When the global value of negative yielding bonds exceeds $US 15 trillion, gold, as a zero-yielding defensive asset, is attractive. With global central banks back in easing mode the opportunity cost of holding gold is low and falling.