Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
U.S. media estimates indicate that Republican presidential candidate Donald Trump has secured the 270 electoral votes needed to win the presidency in the 2024 U.S. election. Han Tan, chief market analyst at Exinity Group, candidly stated that gold prices could ultimately reach $2,800 once the “dust settles” after the election.
However, Joe Cavatoni, senior market strategist, Americas, at the World Gold Council, is more focused on the long-term impact of the U.S. election on the gold market, particularly through policy. While gold prices may experience short-term volatility, policy discussions, clarification, and eventual implementation take time, with effects typically emerging within six months after the election results are announced.
Cavatoni recently mentioned in an interview that with interest rates continuing to decline and geopolitical turmoil persisting, Western exchange-traded fund (ETF) investors are increasingly eager to buy gold. Cavatoni discussed the gold demand trends in the third quarter of 2023, highlighting that Western gold investors, after a period of inactivity, have finally returned.
Gold prices rose slightly on Tuesday, with spot gold increasing by 0.2% to $2,740.96 per ounce, and U.S. gold futures closing up 0.1% at $2,749.70.
Cavatoni explained that, overall, the holdings of gold in investment portfolios have remained stable, but increasing gold allocations requires a decrease in opportunity costs or carrying costs for Western market investors, which is starting to happen.
The latest data from the World Gold Council shows that in the third quarter, global gold demand (including over-the-counter investments) increased by 5% year-on-year to 1,313 tons. Global gold ETFs saw an inflow of 95 tons, marking the first net inflow since the first quarter of 2022, becoming a major driver of demand growth. The demand trend report also indicates a resurgence in retail and institutional demand for gold ETFs over the past six months.
John Reade, a market strategist at the World Gold Council with over forty years of experience in the gold industry, stated that with interest rates falling in Europe and the U.S., demand growth is shifting back from emerging markets to developed markets. He noted that one highlight of the third quarter is the resurgence in ETF demand, especially from the West.
In recent years, the rise in gold prices has been largely driven by record central bank investment demand, but U.S. and European gold ETF investors have remained on the sidelines. Over the past six months, the gold ETF holdings in China and India have grown by about 50% in tonnage. However, by the third quarter, the growth came mainly from the West, especially in North America. The reason is that the Federal Reserve’s interest rate cuts serve as a positive signal and have sounded the starting gun for the return of Western gold investors to ETFs.
