Investors are holding their breath on bullion ahead of a Federal Reserve meeting this week, with gold remaining relatively flat ahead of expected interest rate cuts.
After dropping to a week-long low, spot prices are up just 0.2% to US$2,653/oz, yet sentiment prevails that gold will continue its bull run as global tensions keep boiling and bankrollers send their hard-earned into the precious metal.
Gold’s on a heater that’s seen it jump ~34% YTD, with World Gold Council global head of research Juan Carlos Artigas highlighting its all-time highs with a word of caution to the market.
“Gold is having a record-breaking year due to a confluence of factors, driving the gold price and demand to record levels,” Artigas said.
“And while the current consensus on global economic performance suggests that gold could move sideways, the uncertainty surrounding the geopolitical landscape could provide a springboard for gold next year.”
Analysts say prices are also being subdued due to spare cash diverting to Bitcoin as the cryptocurrency tipped over US$100,000 for the first time yesterday.
“Gold’s final price performance will depend on the interaction of gold’s four key drivers: economic expansion; risk; opportunity cost; and momentum,” Artigas concluded in a note.
World’s biggest find
Chinese geologists have purportedly discovered the world’s largest gold deposit in Hunan province, worth a whopping US$83 billion across a detected 40 gold veins with an estimated reserve of more than 1000 tonnes (30 million ounces).
To put that in perspective, the global market produces roughly 3,600 tonnes annually (127Moz).
And while US bullion trader Scottsdale says the find could be pivotal to the Middle Kingdom’s de-dollarisation wishes, it’s sceptical about the discovery, suggesting more drilling is needed to confirm the reports.
The World Gold Council agrees, saying the claims made late last month are aspirational and the numbers might prospectively be off as reporting standards differ from those conducted in the West.