Gold is supposed to be a means of storing value. It has been doing well in dealing with inflation for a long time. As Andrew Bary pointed out earlier, in 1918 an ounce of gold could buy a good man's suit, which is still the case today.
Gold can also cushion hard times. The S& P 500 index has fallen sharply in the past, but gold has ushered in "spring", which is why some investors bought gold to hedge against market turmoil.
In the money market, the "insurability" of gold to deal with volatility is also evident. According to Kit Juckes, a foreign exchange strategist at Societe Generale, gold outperformed other G10 currencies except the yen, the dollar and the Swiss Franc in 2018.
Given the continuing uncertainty in the foreign exchange market, gold prices are likely to continue to rise. The outlook for the dollar does not look optimistic because of a possible slowdown in the U.S. economy and the huge fiscal deficit of the U.S. government. Meanwhile, the euro looks cheap relative to the dollar, but the main "requirement" for the euro's strength is that news from Europe will not get worse. Obviously, this is not a good reason.
Juckes points out that the reason for optimism about gold is that the fundamentals of the dollar are deteriorating and there is no reason to choose any other currency.
Erik Norland, senior economist at the Chicago Mercantile Exchange (CME), also said that if macroeconomic factors were in place, 2019 would be a good year for gold.
Norland told Kitco News that if the job market continues to tighten, unemployment falls further and inflation pressures rise, this could be very beneficial for gold.
