Gold hit record highs on geopolitical risks and US election uncertainties - HSBC

Recently, uncertainties around the US elections on 5 November and geopolitical concerns have been supporting Gold. The near-term upward trajectory shows no signs of easing. Gold prices could go even higher over the near term and into 2025, but the rally may become overstretched and possibly be curbed when the USD and the US yields stay firm, in our precious metals analyst's view, HSBC' commodity analysts note.

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

"Our precious metals analyst believes Gold has entered a new price paradigm, which will probably remain above $2,200 per ounce, supported by a mix of bullish factors, including "safe haven" demand prompted by geopolitical risks and economic uncertainty. Mounting fiscal deficits are also encouraging Gold demand. Global monetary easing and expectations of further easing have increased speculative demand for Gold."

"The rally is likely to moderate later in 2025, in our precious metals analyst's view

Nevertheless, a combination of physical and financial market factors may tame the rally, as we move through 2025, with Gold prices likely to be moderately lower by end-2025. In the physical market, high Gold prices are driving outright declines in Gold jewellery purchases, alongside lower Gold coins and bar demand."

"At the same time, global Gold output is on an upward trajectory at least for this and next year, with mining being the biggest single source of new supply to the market. High Gold prices are also stimulating scrap supply of Gold. In other words, Gold may face headwinds from weaker demand for jewellery and bar & coins and rising mine supply and recycling levels. Gold exchange-traded funds (ETFs) continue to liquidate holdings, and central bank demand may also moderate in the face of high prices."