I’ve been saying for a while now that the trade war is the big variable to keep an eye on in 2019. If it worsens, it will be bad for commodities prices in general. It will also likely hurt the US Dollar. That and the fear should push precious metals higher, as it has over last quarter.



On the other hand, if the trade war is resolved, the fear should subside, and gold should go back to moving with other commodities, which should rebound sharply upwards.

I’m not worried about reduced safe haven demand for gold because commodities have been pushed down by trade war fear, in most cases, in advance of any actual harm being done to demand. If the negative outlook priced in suddenly turns positive, commodities across the board should perform well in 2019. The metals facing structural supply deficits should do particularly well. And many Asians who feared for their prosperity will feel prosperous again—and buy more gold.

This situation is not a win-win for copper, coal, or corn. But to me, 2019 looks like a win-win for gold.

Tuesday, January 1, 10:58am, EDT, 2019