The price of gold set a new all-time high (ATH) last week at $2790, only to drop after. The fluctuations are linked, among other things, to tomorrow’s presidential elections in the United States. The World Gold Council has also published a summary report of the 3rd quarter of the year. In the face of uncertainty, the demand for gold is still rising.
Gold Hits a New ATH, Uncertainty Precedes Elections
$2790, or 11200 Zlotys, is the new all-time high for an ounce of gold. This is unsurprisingly a consequence of an ongoing trend. Among the factors influencing the price of gold are armed conflicts, a strong demand from central banks, and normalization of interest rates (investors expect the Fed to lower interest rates by 25 basis points at each upcoming meeting this year). Last but not least, pre-election uncertainty in the United States is impacting gold prices. As we know, the outcome of Kamala Harris’s race against Donald Trump will affect the policies of the entire world.
Another factor prioritized by Ryan McIntyre from brokerage firm Sprott: gold prices are rising in the face of increasing U.S. debt. At present, the government’s debt stands at $35 trillion and continues to grow at a substantial pace.
This simultaneous combination of various factors, referred to by Americans as the “perfect storm,” has brought us here. Gold has not become a speculation, nor a physical bitcoin. It is a matter of the culmination of different storms, both political and economic.
Gold Demand Continues To Rise
This information is provided by the World Gold Council, which indicates that total demand for the yellow metal in the 3rd quarter of 2024 increased by 5% year on year to 1313 tons. Of course, this is reflected in the price, which hit a series of new highs during the previous quarter. Demand value increased by 35% YoY, surpassing $100 billion for the first time in history.
While sales of gold bars and coins fell by 9%, the 3rd quarter of 2023 was exceptionally strong in this regard. Despite an obvious increase in the sale of gold jewelry in India, there was a 12-percent drop globally. Demand from central banks amounted to 186.2 tons, which is a 49% decrease compared to the same quarter last year, which was very strong.
Demand for gold however has increased amongst technology producers, who are increasingly using the precious metal in the production of solutions based on artificial intelligence. Growth was 7% – to 83 tons year on year.
The report also indicates that inflows to ETF amounted to 95 tons.
Analysts Predict Interest Rate Cuts in Poland
EY analysts have published economic forecasts for the coming years. According to them, the Polish economy is in a good shape, and the GDP will grow. Also, the inflation which is currently at 5% is expected to increase. These analysts point out that in March 2025, after the new inflation projection by the NBP, there will start a discussion on interest rate cuts. These are expected around mid-next year. Altogether, next year we can expect four cuts by 25 basis points, and in 2026, when inflation drops below 3.5%, further cuts of 50bp.
Michał Tekliński, Gold Market Expert at Goldsaver.pl, Goldenmark Group
Source: https://ceo.com.pl/popyt-na-zloto-rosnie-dzieki-perfect-storm-w-swiatowej-gospodarce-28854
