What Might Support the Gold Price in 2020?

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Change from last weeks gold and silver prices

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NZD Gold Pulling Back After Sharp Rise

After an almost $200 per ounce jump since late December, gold in NZ Dollars has pulled back sharply this week. Down just over 3%. With the USA and Iran seemingly looking to de-escalate the tensions.

So we could see a pull back to the 50 day moving average (M.A.). Or even down to retest the upper blue trend line. So a good buying zone is approaching now that gold appears to have bottomed out at the end of 2019.

Remember the Iran tensions only occurred after New Year. So gold has merely retraced that late surge. Gold was already rising prior to the killing of the Iranian General.

NZ Dollar Gold Chart

Silver Also Dipping

Silver has already corrected further than gold. Now retesting the upper trendline in the bullish flag formation. Silver is back to neutral on the RSI already though. So given it didn’t rise as strongly as gold due to the Iran conflict, perhaps silver won’t pull back much further?

NZ Dollar Silver Chart

NZ Dollar May Be About to Rise Again

The NZ dollar may be levelling out now after falling sharply for the last 2 weeks or so. The Kiwi dollar looks to be in an uptrend in the medium term at least. How will this affect gold and silver prices in New Zealand in 2020? This is the subject of this week’s feature article below.

NZ Dollar Chart

Need Help Understanding the Charts?

Check out this post if any of the terms we use when discussing the gold, silver and NZ Dollar charts are unknown to you:

Gold and Silver Technical Analysis: The Ultimate Beginners Guide

Continues below

 

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If the NZD Rises Against the USD in 2020 How Will This Affect Gold and Silver Prices for New Zealanders?

The chart above shows that the NZ Dollar has been in an overall uptrend since October of last year. In our 2019 review and Guesses for what 2020 has in store for us, we also said we thought the NZ Dollar would strengthen against the US Dollar in 2020.

So what does this mean for New Zealand precious metals buyers?

Last week we received a question from a reader on just this very thing:

“When we buy precious metals, all prices are according to USD, then with varied exchange rates to NZD. Of course, people are expecting the prices to be going up to take profit.

If the USD is expecting to be going down in the future, whereas supposing the metals prices & NZD are going up, the profit will be eroded by the NZD appreciation. For example, if I buy gold at USD1500 and sell USD2000, the net gain is USD500, but if NZD appreciates 20% against USD, I make much less than it seems.

I have started to think what is the point buying metals, even though the prices are going up.

I am wondering how New Zealanders make money out of metals?”

If you’ve wondered the same thing, then this weeks feature article has you covered.

We also look at whether it is guaranteed that the US Dollar will collapse faster than other fiat currencies? Is this so set in stone?

In a US Dollar Collapse Won’t The Rising NZ Dollar Cancel Out Any Gold/Silver Gains?

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What Caused the Sharp Run Higher in Gold?

The run higher in gold from late December caught many people by surprise. The World Gold Council had a good summary of what the drivers behind this rally may have been:

Drivers behind the recent gold rally

  • A technical breakout
  • Bullish positioning in derivatives markets
  • Light trading volumes
  • Portfolio rebalancing at the end of 2019 especially as investors hedged risk asset allocations
  • Federal Reserve (Fed) repo activity
  • Increased geopolitical risk

See full article: Source.

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What Else Might Support the Gold Price in 2020?

Here are some of the many other factors that could be accommodative to the gold price in 2020:

A Loose US Central Bank: After reversing course on its interest rate rises in 2019, the Fed’s balance sheet has been increasing at the fastest pace since the height of the 2008 financial crisis. Interestingly gold jumped when the Fed reversed course.

Negative “Real” Interest Rates: Real (after inflation) interest rates remain negative. This is historically good for the gold price.  See: Real Interest Rates vs Gold Prices – What Can They Tell Us About When to Buy Gold in New Zealand?

Recession?: Here in New Zealand and across the globe economic growth remains sluggish. It looks like central banks are intending to pump new money into the system in response to any downturn. This is likely to be positive for gold.

Central Banks to Continue to Buy: 2018 was a 50 year high for central bank gold purchases. The World Gold Council expect the final 2019 data to be even higher. With what’s going on across the globe it’s likely central banks will continue to buy heavily.

Share Markets: Generally if share markets are going well gold doesn’t. However last year we saw both shares and gold rise. This also occurred for a number of years in the mid 2000’s. Our guess is with the Fed pumping more liquidity into the system we could see both shares and gold rising in 2020 too. But if we see a share market correction or even just heightened volatility this could be even more supportive of gold.

Negative Yielding Debt: The total of global negative yielding bonds has fallen from the 2019 peak. However, there is still reason for concern with the likes of German government bonds currently all negative. As we reported last year gold prices have been moving in tandem with negative yielding debt. So a further increase in negative yielding would be bullish for gold.

A Heightened Conflict with Iran?: Last week the tensions between the US and Iran heightened. However since then both sides have dialed things back a notch. But if an escalation or conflict were to occur, this could further boost gold.

Even without any “black swans” gold looks set to have a solid year in 2020.

The sharp jump in price following the US drone strike on the Iranian general shows how unexpected events can sharply impact the gold price.

This highlights the importance of having your insurance in place before it is actually needed. So get in touch today for a quote or to have any queries answered.

  1. Email: orders@goldsurvivalguide.co.nz
  2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
  3. or Shop Online with indicative pricing

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This Weeks Articles:

In a US Dollar Collapse Won’t The Rising NZ Dollar Cancel Out Any Gold/Silver Gains?

Thu, 9 Jan 2020 11:20 AM NZST

In a US Dollar Collapse Won't The Rising NZ Dollar Cancel Out Any Gold_Silver Gains_The US Dollar may well have recently entered another cycle of decline against the other major currencies of the world. This week we have a question from a reader as to how this might impact any gains in the NZ Dollar gold price: When we buy precious metals, all prices are according to USD, then […]

The post In a US Dollar Collapse Won’t The Rising NZ Dollar Cancel Out Any Gold/Silver Gains? appeared first on Gold Survival Guide.

Read More…

Gold & Silver Performance: 2019 in Review & Our 2020 Guesses

Wed, 8 Jan 2020 12:55 PM NZST

It’s time for our annual review of the performance of gold and silver in New Zealand dollars. We’ll also look back on our predictions from the start of 2019. Then finish off by making a few guesses as to what 2020 could have in store for us… 2019 saw a complete reversal from 2018 overall […]

The post Gold & Silver Performance: 2019 in Review & Our 2020 Guesses appeared first on Gold Survival Guide.

Read More…

Gold and Silver Surging After Iranian Missile Attack on US Base in Iraq

Wed, 8 Jan 2020 7:18 AM NZST

Prices and Charts Looking to sell your gold and silver?   Visit this page for more information Buying Back 1oz NZ Gold 9999 Purity $2274 Buying Back 1kg NZ Silver 999 Purity $846 Iran Launches Missile Attack on US Base in Iraq Happy New Year – we hope you had a relaxing holiday, or – […]

The post Gold and Silver Surging After Iranian Missile Attack on US Base in Iraq appeared first on Gold Survival Guide.

Read More…

How Does War Affect the Gold and Silver Price?

Tue, 7 Jan 2020 2:01 PM NZST

How-Does-War-Affect-the-Gold-and-Silver-Price_How might a war with Iran affect the gold and silver price? See what can be learnt from past wars and how they impacted precious metals prices… War and Gold and Silver Prices US President Donald Trump ordered the killing of Iranian General Qassim Soleimani over the weekend. The high ranking Iranian General was killed […]

The post How Does War Affect the Gold and Silver Price? appeared first on Gold Survival Guide.

Read More…
As always we are happy to answer any questions you have about buying gold or silver. In fact, we encourage them, as it often gives us something to write about. So if you have any get in touch.

  1. Email: orders@goldsurvivalguide.co.nz
  2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
  3. or Online order form with indicative pricing


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Have a golden week!

David (and Glenn)
GoldSurvivalGuide.co.nz
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The Legal stuff – Disclaimer:
We are not financial advisors, accountants or lawyers. Any information we provide is not intended as investment or financial advice. It is merely information based upon our own experiences. The information we discuss is of a general nature and should merely be used as a place to start your own research and you definitely should conduct your own due diligence. You should seek professional investment or financial advice before making any decisions.
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