Gold appreciation, Johnson attitude toward EU, Global Economy

Nikolas Stylianou

18 December 2019

Gold gain more appreciation from Investors

 During last four years gold has been traded on the same scale with relatively limited profit margins for investors. In early 2019 the price of gold began to rise again with a 15% rise reaching $1557 in September which followed by December at $1460. Analysts expecting price to proceed further to the upside during 2020.The ECB’s decision to enhance the bond market program on September cause discouragement to investors for a short-term rise in key interest rates as a result this followed by dollar depreciation. As Thorsten Polleit said, significant factors that gold prices have steady rise is largely due to the lax monetary policy that many central banks have been set during the year. According to World Gold Council (WGC) data in the first nine months of 2019 banks purchased almost 550 tons of gold which indicated 12% more than a year earlier. recent months, gold trading companies have been seeing increased demand for gold bars, currencies or ETFs. The predictions show that the interest in gold will continue to be high, probably due to potential negative developments such as US-China trade deal even the Brexit deal. Russia Central Bank had the biggest gold purchases this year followed by Chinese, followed by Turkish and the largest reserves are held by the US Fed and German Bundesbank.

Boris Johnson attitude toward EU

 A Downing Street source has denied reports to the British press from European officials and supporters of staying in the EU about Johnson’s move to a softer Brexit after securing broad self-sufficiency in the election. As Daily Telegraph reports, some government executives have argued that Boris Johnson after election’s victory will try to achieve a closer trade relationship with the EU than the agreement that was in force. These executives that there is an intension to bring the UK product rules as closely as possible to EU rules as a result the overall trade agreement would be as favorable as possible for the UK. As per Telegraph European leaders decided to leave open the possibility for a broad agreement with UK by the end of the transitional period in December 2020 without strict conditions for the content of the negotiations, considering that there might be a shift from Johnson to a softer Brexit. A member of the Eurosceptic group of conservatives warned that would be electively disastrous if Boris Johnson used the majority, he secured to request an extension of his transitional period beyond 2020. In the meantime, pound dollar reached 1.35 and it seems that pair is moving in overbought levels. Remains to see what is going to happen to pair after some pessimist investors expressed their belief of pound depreciation

 Global Economy

The global economy is recovering, according to the recent economic and commercial developments in the US and China in order to reduce the slowdown. Last five months the US business activities were more efficient according to recent research that published on Monday. China’s also industrial outcome and consumer spending improved during November. Although that Dow Jones showed some weakness on some minor resistance levels reached its highest levels as SP500 and Nasdaq did. Federal Reserve said that would stop for a while the interest rates cuts suggesting that the economy found a stability. Monday’s market reaction could be deemed as a reflection for US-China deal which probably means that the trade dispute has reached peak tariffs and as per UBS economists this could lead equity market moves further to the upside driven by business confidence and recovery in investments. In addition, the Europe 600 Index is going to reach a major support level on its highest historic high back again since 2015, though new data has shown that the European economy still has insufficient and low economic growth.