Gold outperformed other asset classes, including US equities, last year for the first time since 2011. However, this was due more to gold's relatively low volatility than to spectacular price gains. After losing 8.5% in the first nine months of the year the gold price has risen by 9.0% since late September, driven largely by the dollar stuttering on speculation that the US Federal Reserve (Fed) might slow its interest rate tightening.
Cryptoassets have failed to exhibit a negative correlation to mainstream assets and are unlikely to constitute a viable alternative to gold.
The downturn in crypto mining infrastructure will cut gold demand as it is used in smartphones, game consoles and automotive electronics.
China’s environmental regulations will hurt cyanide-dependent gold mining and reduce demand for gold for use in printed circuit boards.
Freeport-owned Grasberg, the largest gold-copper mine, will reduce its volumes by over two-thirds in 2019 as output is moving underground.
