Venezuela will sell 15 tonnes of gold from central bank vaults to the United Arab Emirates in coming days in return for euros in cash.
After the Fed decision not to raise raise rates near the end of the first month of trading in 2019, the price of gold is now only $60 from hitting a 5-year high as the Baltic Dry (Shipping) Index collapses.
Central banks bought more bullion last year than any time since 1971, when the U.S. ended the gold standard.
Demand is also likely to rise on an increase in the number of days considered auspicious to buy bullion in the Hindu calendar in 2019.
The Federal Reserve Open Market Committee met yesterday and held interest rates steady in the 2.25-2.50% range. This wasn’t really a surprise. More significantly, Fed Chair Jerome Powell kept up the dovish rhetoric, saying, “The case for rate increase has diminished…
“As the demand for precious metals shows some life once again, sales of the U.S. Mint Silver Eagles jumped in January.”
Global gold demand grew by 4% in 2018, driven by a multi-decade high in central bank buying, according to the World Gold Council’s Gold Demand Trends 2018 Report. Gold demand came in at 4,345.1 tons in 2018. That was up from 4,159.9 tons the previous year. This was in line with the five-year average growth.