As Fed Rethinks Path for Rates, Gold’s Poised to Jump in 2019 -Bloomberg
"Gold may be poised to rally as speculation mounts that the Federal Reserve will hit the pause button on interest rate hikes in 2019. After lift-off in late 2015 followed by a rise a year later, the central bank has since steadily raised benchmark rates and is widely expected to do so again this month. But the path after that is clouded after Chairman Jerome Powell said Wednesday rates are 'just below' estimates of the so-called neutral level, which markets took to mean a softer stance than previous comments.
It was 'getting pretty obvious that at some point Powell would have to flinch,' said Trey Reik, senior money manager at the U.S. unit of Sprott Inc., which oversees $7.6 billion. 'Once you get to the consensus view that the Fed may be done, the dollar may come under severe pressure. Gold will erupt.' Goldman Sachs Group Inc. recommends an outright long gold position into next year. 'If U.S. growth slows down next year, as expected, gold would benefit from higher demand,' analysts including Jeffrey Currie said in a Nov. 26 note. 'If people get a sense that unemployment’s going up, heaven forbid, we’re going to see great volatility in 2019, that’s going to be a cue to sell the dollar, and that’s going to be a cue to buy gold in much bigger size.'"