Gold rose 13.2% per Troy ounce in July-September due to geopolitical tensions, central banks' interrest rate cuts, and increased demand in China
The ounce price of gold saw its highest quarterly gain since 2016 in July-September amid interest rate cuts by central banks and geopolitical tensions leading to rising demand for the safe-haven asset.
The ounce price of gold saw a record high at $2,685.61 in the third quarter of the year, completing the July-September period at $2,634.70, up 13.2%.
Falling interest rates reduced the opportunity costs of holding noninterest-bearing gold.
Back in 2016, gold gained 16.2% per Troy ounce in the first quarter.
- Demand from Asia gave way to rise in gold
The demand for gold increased in Asia, especially in China, as a safe-haven asset against geopolitical and economic uncertainties, analysts say.
Declining confidence in other investment options, such as real estate and stocks, led to a higher preference for gold in China. Troubles in the country's real estate sector gave way to rises in gold.
Meanwhile, the decline in bond yields, the Russia-Ukraine war, and the upcoming US presidential elections in November pushed gold prices upwards.
Geopolitical risks played a major role in maintaining the strength of gold, while the safe-haven status of other precious metals continued.
The ounce price of silver rose 6.9% to $31.2 in the third quarter of the year due to the slowdown in production globally, and the increase in the industrial sector.
Silver supply lagged behind demand, triggering concerns that it would lead to a deficit, as it is often used in the manufacture of many products, such as automobiles, solar panels, electronics, and jewelry.
Analysts said China may increase its silver imports as the country continues to produce solar panels in large quantities.
The rise in silver prices can also be traced back to when the US Democratic candidate, Vice President Kamala Harris, said she supports diverse energy sources to reduce the country's foreign dependence on oil during a presidential debate with the Republican candidate, former President Donald Trump.
Analysts estimate that the ounce price of silver may see $40 in 2025, as it is one of the commodities that will be the most significantly affected by economic activity, while silver could benefit from rising gold prices.
Analysts also say the silver market may continue to run a deficit in the coming years, pushing its price even higher.
