The price of gold has climbed 19.4% between January and August to $1,525/oz following geopolitical events left investors feeling bearish towards the global equity market.

Gold ETFs saw significant inflows over the first eight months of the year as well as the performance of gold-related products, such as gold mining ETFs, matching returns and resulted in analysts having bullish forecasts. However, this rally is said to be coming to a conclusion, according to a report from Capital Economics.

The global economic research house expects a recovery in bond yields and rise in investors’ risk appetite will drive down the price of gold.

Gold-backed ETF holdings grow for third consecutive month

Capital Economics expects the price of the precious metal to have reached its ceiling however, weakening global growth, high risk aversion and low interest rates should keep the value of gold to remain steady for the remainder of the year.

WisdomTree forecasted the price of gold to continue climbing up to $1,550/oz in the early months of 2020 but Capital Economics predicts the price to fall to $1,350/oz by the end of 2020.

Other ETF issuers remain bullish towards the yellow metal as HANetf announced its partnership with the Royal Mint to launch a gold ETF early next year.

While the price of gold is expected to not fall any further this year, the gains made so far in 2019 are predicted to be wiped out come 2020.

The US Treasury yields are said to recover next year as no further easing is expected to be implemented in 2020 and will reduce the demand for commodities.

Outside of the US, it is unlikely bond yields for the likes of the euro-zone and Japan are to fall much further.

Other factors which are likely to cause the value of gold to decline include a rise in risk appetite as fears of a recession subside as well as consumer demand in China and India is likely to remain subdued.