The SPDR Gold Shares (NYSEArca: GLD), the largest physically backed gold-related ETF on the market and go-to option for gold exposure for many ETF investors, is up nearly 3% to start 2019 indicating bullion could be poised to live up to bullish expectations this year.
Gold may continue to shine in 2019. As the market environment shifts, some analysts believe that the depressing influences on gold that occurred during the before the last quarter of 2018 will not likely be repeated in 2019. Furthermore, gold will see continued investment demand among the emerging markets, along with increased demand for safe-haven plays across developed markets.
“Gold prices are hitting eight-month highs, thanks to investors looking for an alternative to stock market volatility,” according to ETF Daily News. “Prices are also being supported by a weaker dollar and buying by global central bankers and Asian jewelry buyers.”
Demand Picture for Gold
Some data points indicate gold demand was solid last year even amid the challenges of the stronger dollar and rising U.S. interest rates.
According to the World Gold Council, holdings in global gold-backed ETFs and similar products increased by 69 metric tons to 2,440t in 2018, bringing in about $3.4 billion in net inflows. Global gold-backed ETFs grew 3% in 2018 on strong demand for European funds and increased global inflows over December, making this the first time since 2012 that the value of gold-backed ETF holdings finished the year above $100 billion.
“Gold futures closed above the key $1,300 per troy ounce this week, and the February contract closed at a high of $1,308.90 Tuesday. Gold had fallen into a slump last summer and had been held back by a soft demand picture,” reports ETF Daily News. “The changing demand dynamic, and a flight to safety by skittish investors has changed the prospects for gold and it could perform much better in 2019.”