The SPDR Gold Shares (NYSEArca: GLD), the largest gold ETF, and other gold-backed ETFs are rallying to finish 2019 as the yellow metal notched its fifth consecutive day of gains Monday. Although gold won’t finish as 2019’s best-performing commodity, its performance is undoubtedly impressive as highlighted by a year-to-date gain of 17.40% for GLD.

In fact, some commodities market observers believe the yellow metal can continue delivering solid showings in 2020. The weak dollar is helping lift gold into the end of the year.

“A gauge of the greenback is set for the biggest quarterly loss since the first three months of 2018,” reports Bloomberg. “After cutting rates three times this year, the Fed’s rate-setting Federal Open Market Committee is expected to stay on hold through 2020. The central bank is also on watch this week to prevent any repo market disruption.”

Bullish Outlook

While good may not duplicate its 2019 showing in 2020, many market observers expect bullion to deliver more upside in the new year.

Gold prices have kept gaining ground in recent weeks despite healthy economic data and President Donald Trump’s provisional trade deal with China, which helped assuage market fears of a recession or a global economic slowdown and have pushed U.S. stocks to a series of all-time highs.

“Minutes from the Fed’s December meeting will be released on Friday, with investors on the lookout for more color on the thinking behind the unanimous decision to keep rates on hold after the three cuts in 2019, and on policymakers’ apparent preference to keep them steady next year,” according to Bloomberg.

Gold ETFs previously rallied amid increased expectations of a U.S. rate cut, even as some investors locked in profits from bullion’s recent rally. Gold is believed by many investors to be inversely correlated with interest rates. Rising interest rates make bonds and other fixed-income investments more attractive so that the money will flow into higher-yielding investments, such as bonds and money market funds, and out of gold, which offers no yield at all during times of higher interest rates, and back into gold ETFs.

Investors added more than $350 million to GLD last week.

For more gold investing news and strategy, visit our Gold category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.