Yellow metal has always been the focus of attention of investors, attracting capital with its prospects. Most often, its role was reduced to the status of a safe haven asset, and it remains to this day. It was this perception of the precious metal that raised its quotes to an unprecedented height and brought considerable profit.
Summing up the preliminary results of the third quarter of 2019, experts analyzed the situation and came to the conclusion that gold coped with the role of a protective asset by 100%. Yellow metal showed higher returns than the DAX and Dow Jones stock indices.
Since the beginning of this year, the cost of precious metals traded in US dollars has increased by 16.8%, while in European currency the increase amounted to 22.3%. The reason for this imbalance was the gradual depreciation of the euro against the "American." As a result, European investors received more profit from investments in gold than American ones.
In the global stock markets, yellow metal also took a leading position. Analyzing income from the German DAX index and the American Dow Jones index, experts concluded that gold overtook them in this indicator. Profit from investing in precious metals, which is traditionally perceived as an asset-refuge, exceeded analysts' forecasts.
At the beginning of last month, the value of gold traded in euros set a new record, reaching € 1,413. Unfortunately, precious metals traded in dollars did not have enough 27% to reach price peaks, analysts say. Nevertheless, the yellow metal was still at its best and retains first place on the "profitable" pedestal.
One of the key factors behind the price increase of gold was the decline in the yield on 10-year US government bonds. It declined in price by 37%, and this gave odds to precious metals. As a result, most investors around the world turned their attention to yellow metal, raising its quotes with active purchases. But experts do not exclude the high probability of capital outflows from the stock market to the precious metals market, in particular to gold. This may provoke another price rally among precious metals, experts are sure.
Over the past three days, yellow metal has been striving to the top to reach a correction, soaring to the level of $ 1,520 per 1 ounce. However, the gold rally was interrupted by growing demand for the US dollar and the subsequent appreciation of the US currency. At this time, gold slightly "gave back", dropping to a local minimum of $ 1,480. Thus, analysts expect further testing of the target support level of $ 1,460 per ounce, which will be a stepping stone for the next growth. Now, precious metal is currently trading in the range of $ 1,513– $ 1,514 per ounce.
The increase in the price of yellow metal this year brought not only positive moments. It provoked a small effect with a minus sign - high gold volatility. However, the level of this volatility is much lower than the quotes of oil or silver. Analysts believe that these indicators fit into the framework of permissible price fluctuations. Therefore, they recommend that investors and traders keep up to 10% of their gold quotes in their investment portfolios in order to minimize risks on other assets.
