Can gold maintain its rally?

Gold prices touched their highest levels in ten months last week, at about $1,330 a troy ounce. The precious metal is back in favour as investors seek to hedge against the risks of a global economic deceleration, a no-deal Brexit and enduring trade tensions between the US and China.

It is a clear performance given that global capital markets have recovered this year, which is negative for gold. Gold has several factors in its favour: the Fed is not expected to raise rates this year while emerging market central banks such as Russia are continuing to buy gold to diversify their reserves.

Investors have likewise converged on gold-backed ETFs this year, with global holdings rising by 1.49m ounces this year. That buying is expected to go on, as there is a heady cocktail of drivers for investment demand, including Brexit, volatility in the Middle East, and US-China tensions. The consensus forecast is that gold will go on climbing to $1,368 a troy ounce by 2022.