Following the Federal Reserve’s 50 basis point rate cut in mid-September, the global easing cycle for policy rates is now in full swing. Despite relatively high policy and market interest rates, the U.S. economy has begun a slow recovery, with growth surpassing its potential rate. The Federal Reserve is confident in achieving its 2% inflation target and is shifting its focus towards full employment. The Bank of Canada has been the most aggressive in cutting rates, having lowered them three times since mid-2023, making its potential market impact noteworthy.
In the long term, the Federal Reserve‘s rate cuts have stimulated investment demand and enabled central banks to purchase gold as a hedge against the weakening U.S. dollar. The gold bull market is not yet over, with prices expected to reach new record highs. Silver, due to its unique properties, is crucial in various industrial applications, and demand for silver in these sectors is expected to grow by 15% annually, reaching over 1.2 billion ounces by 2025.
On the other hand, two key elements for achieving the 2050 net-zero emissions target are renewable energy and electric vehicles (EVs). In the first quarter of 2024, EV sales grew by about 25% year-over-year compared to 2023, surpassing 3 million units. According to BNEF’s forecasts, EVs will account for 45% of global passenger vehicle sales by 2030.
Lithium iron phosphate (LFP) battery technology, crucial in many fields, is poised for significant growth as EVs rise in popularity. The LFP battery market is projected to expand from $19.07 billion in 2024 to $124.42 billion by 2032.
Despite sharp declines in lithium prices and challenges such as overcapacity and falling raw material costs, the surge in EV demand will drive the expansion of the lithium market. By 2025, global lithium demand is expected to exceed 1.4 million metric tons of lithium carbonate equivalent, a 53% increase from 2023. Nickel, a key component of EV lithium-ion batteries, is also expected to see significant demand growth as the auto industry transitions to electrification.
In the real estate market, increased expectations of rate cuts and lower bond yields will boost commercial real estate investment activity and asset values. As Richard Barkham, Global Chief Economist at CBRE, said, next year’s real estate investment will be a “slow, steady…rising tide,” rather than a flood of cash.
The upcoming 2024 GCFF Annual Toronto Investment Conference will be held on Saturday, October 19, at the Courtyard Toronto Northeast/Markham Marriott Hotel. The event will cover nearly all of this year’s hot topics, including real estate investment, energy and mining, and technology. Executives from various companies will deliver in-person presentations, offering investors the chance to engage in one-on-one discussions and gain valuable market insights.
We are excited to reconnect and meet with Toronto’s industry experts, company executives, and investors community!
Free Registration, click here.