In 2019, the backlash of gold bulls continued, with spot gold hitting the $1,290/ounce mark at one time.
Clif Droke, an analyst, believes that the bullish trend of gold in the medium term will continue in terms of dollar, Treasury bond yields and stock markets, and there is still much room for bulls to follow.
Gold in 2018 was on the rise and on the decline. After a sharp rise at the beginning of the year, it suffered six consecutive months of decline, making it the first year of decline since 2015.
But since testing the bottom of $1,160 an ounce at the end of August, gold has gained nearly 6 per cent. At the end of the year, the rally was very strong, especially compared with the S&P 500 index.
Since December, the Gold/S&P 500 index has risen sharply.
Droke believes that gold will continue to be bullish as long as the Gold/S&P 500 index remains above its 15-day moving average.
In addition, the performance of U.S. Treasury bond yields also needs attention.
The 10-year Treasury Bond Yield Index (TNX) continues to be in a downward trend in the near future and shows no signs of bottoming, which is also good news for the gold medium-term trend.
Of course, the weak performance of gold in 2018 was largely undermined by the strong US dollar, but now the US dollar has begun to signal continued weakness.
The dollar index bullish fund (UUP) is still significantly lower than the 50-day moving average, indicating that its performance is still quite weak, which means that gold bulls continue to dominate the market in the short term.
In terms of gold itself, iShare Gold ETF (IAU) continues to be on the upward trend and is significantly higher than its rising 15-day average.
Of course, under the sustained rise, there is a risk that gold prices will rise excessively, and there may also be a correction for the fall. But generally speaking, as long as it is above the 50-day average, the Bulls need not worry much, and the fall will only be temporary.
From these points of view, the beginning of this year may be a time for gold to perform in a big way.
