Gold reached all-time highs due to geopolitical risks and US election uncertainties – HSBC

Recently, uncertainties surrounding the US elections on November 5 and geopolitical concerns have been supporting Gold. The short-term bullish trajectory shows no signs of slowing down. Gold prices could rise further in the near term and into 2025, but the rally could become excessive and possibly be curbed when USD and US yields hold firm, our precious metals analyst believes , point out HSBC commodity analysts.

Gold prices likely to remain above $2,200 per ounce

“Our precious metals analyst believes gold has entered a new price paradigm, which will likely remain above $2,200 per ounce, supported by a mix of bullish factors, including ‘safe haven’ demand driven by “Geopolitical risks and economic uncertainty. Rising fiscal deficits are also fueling demand for Gold. Global monetary easing and expectations of further easing have increased speculative demand for Gold.”

“Rally likely to moderate later in 2025, our precious metals analyst views

However, a combination of physical and financial market factors may slow the rally, as we move into 2025, with Gold prices likely moderately lower by the end of 2025. In the physical market, high Gold prices are causing absolute declines in purchases of Gold jewelry, along with lower demand for Gold coins and bars.”

“At the same time, global gold production is on an upward trajectory at least for this and next year, with mining being the single largest source of new supply in the market. High gold prices are also stimulating scrap supply. Gold. In other words, Gold may face headwinds due to lower demand for jewelry and bars and coins, and increasing mining supply and recycling levels. Gold exchange-traded funds (ETFs) continue. liquidating holding companies, and demand from central banks may also moderate in the face of high prices.”