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Is it Time to Diversify your Investment Portfolio? - A Gold Forecast for 2019

Tuesday, February 5, 2019

This year could well bring with it several things that impact the value of gold. These events range from a highly concerning US-China trade war that could have wider reaching consequences than people predicted, through to Brexit and poorly performing world stock markets.

It’s not always the case that disruptive events such as these will automatically cause a rise in the gold price, but they could…

On balance, investing in gold has always been a respected move in times of turmoil. And diversifying your portfolio with what many consider to be a safe-haven asset could be a worthwhile investment in 2019.

First, let’s take a look at some of the major considerations starting with what some of the big investment banks are saying. 

A word from the banks

Many large investment banks and investors foresee gold performing well in 2019 by the end of this economic year.

According to Bank of America Merrill Lynch, the value of gold is set to surge over the next year due to concerns over the widening US budget deficit and a tariff-driven trade war that could damage the country’s economy.

Goldman Sachs is also making similar noises, with attractive prices predicted if US economic growth slows down.

And at J.P. Morgan, “gold will likely reprice lower through the middle of next year, at which point the Fed’s policy will move into restrictive territory,” according to Natasha Kaneva, head of metals research & strategy.

She added: “We still keep a bullish bias in place for the second half of 2019, as we believe the development of an inverted yield curve in the US will likely attract increased interest in gold among investors.”

What does 2019 look like?

Taking the important macro factors into consideration – as all good forecasts aim to do – gold is likely to shine if the US keeps moving in the direction it has been over the last few months.

Poorly performing equity markets and a weak property market have been concerning for the US as has Trump’s stance against China in what many believe is an alarming build up to a potentially disastrous trade war.

If more cracks in the nation’s economy start to emerge, this could impact the value of the dollar, and by association, could increase the value of gold, as past events have taught us.

We’re not saying that things are the worst they’ve ever been, but when considering all the factors at play as we start 2019, there are a number of things that could go wrong (or right, depending on where your significant investments sit).

In Europe, things are looking just as concerning, albeit more confusing than anything happening in the US.

The doubt and anxiety caused by Brexit aren’t doing anyone any good, on either side of the fence, and a bad agreement between the parties involved could potentially lead to big consequences for major industries that rely on trade and migration.

We don’t need to remind you, but the knock-on effect of any country’s economy will always, in some way, impact other nations around the world, as we become increasingly interconnected and reliant on each other through global business and economics.

And what’s happening in China, the nation that has been the largest single contributor to global economic growth over the past several years?

Well, things are slowing down. And while we don’t know the exact impact of this yet, it’s likely that we’ll start seeing a significant amount of change and potentially increased interest in assets like gold that many believe offer unbeatable stability during times of uncertainty or transition.

Diversifying your portfolio with gold

One of the biggest benefits of investing in gold is its ability to add asset diversity to your portfolio. Adding a little gold in combination with other assets such as stocks and bonds makes people feel a lot more comfortable in general.

If the stock market drops, at the very least you won’t be completely exposed, and may even make a small profit if the gold price goes up. Essentially, experts believe it is a good way to add some protection to your assets and benefit from diverse portfolio percentages that are not too reliant on any one market.

Diverse portfolio advantages, according to gold investment advice, also include variable gold investment returns if you invest your money at the right time. For instance, during times of uncertainty and market stress, many often look for gold investment advice with the intention of assigning a portion of their capital to this precious metal.

Investors may put their capital into other assets, such as government bonds or real estate to generate a diverse portfolio return, but gold, whether in the form of  gold bullion or gold coins, is a popular choice when faced with uncertain economic outlooks.

Is it time to buy gold?

When searching for gold investment advice, there are many people out there who will tell you that having some portion of your wealth invested in gold is a wise thing. So from this standpoint, yes, it could potentially be a great time for you to buy gold.

As for investors who are seeking a substantial return on their investment, there could well be a significant rise in the gold price this year – but this largely depends on how things play out in terms of large uncontrollable geopolitical factors and how they impact the global economy.

It’s certainly a time to watch this particular space, keep an eye on the news about the gold price and consider whether now is the right time to put your money into gold.

To find out more about investing in gold in 2019, get in touch with the Gold Bullion Company for gold investment tips. Whether you’re looking for gold investment bullion or coins, we’ve got a wide range of products that could help you enter the world of gold investments this year.