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Europe, United States, and China – Past, Present, and Future (of the Gold Market)

February 1, 2019, 6:21 AM Arkadiusz Sieroń , PhD

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Old continent, the global hegemon, and the rising power. Europe, the United States, and China – where will the black swan land?

On the surface, the world is in an excellent shape. There is a slowdown in GDP growth, but the global economy is still expanding well.  In most developed countries, inflation is stable, while unemployment rate is very low. However, investors feel that something is in the air. What will, and where, surprise the world tomorrow? Will it be  Donald Trump’s tweet? Will Brexit finally happen? Will Eurozone go bankrupt? Will China fall into recession? Will there be a war over the South China Sea? 

In this edition of the Market Overview, we answer some of these questions. The starting points of our analysis are two important anniversaries. We celebrate 20 years of the euro and 40 years of a market reform in China. We show that although the construction of the Eurozone is flawed, the rumors about the death of euro are exaggerated.

It’s unimaginable what great progress China made in the last forty years. The rise of such economic power triggered many fears (or hopes) about the future international order – but, as we present, the China’s threat is overblown. The slowdown in China’s economic growth is more probable however, which will not be meaningless for the gold market. Last but not least, we examine whether, as some analysts claim, 2019 will be similar to 2016, drawing important conclusions for the gold outlook for the upcoming months.

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