Election coverage has understandably been dominating the news cycle these past few weeks and may continue to do so for months to come. But while the headlines focus on election results, another story may have a greater impact on your financial well-being: For the first time in history, global gold demand has exceeded $100 billion, according to the Q3 2024 report by the World Gold Council.
I spoke to Philip N. Diehl, U.S. Money Reserve’s President and the 35th Director of the U.S. Mint, about the trends that have led to such enormous gold demand.
For me, Diehl’s years of experience in the world of precious metals make his insights invaluable. This is what he had to say about the world’s soaring gold demand:
“One of the most remarkable features of the past year’s historic gold rally is that demand for the precious metal continues to rise despite dramatic increases in price. The World Gold Council reports that global year-over-year demand in the third quarter of 2024 rose 5.1% while prices rose 28.3%.
“Usually, one would expect such rapid price increases to suppress demand, but gold has entered a ‘virtuous cycle’ where rising prices are being supported by both wealth generation and safe-haven buying, with new sources of demand rising to sustain the rally.
“In Q3 2024, investment and industrial demand for physical gold rose even as central bank buying and jewelry consumption declined. Central banks have been a major source of demand growth over the last two years, and I expect them to return to the market soon. I see central banks, along with precious metals investors and Asian jewelry consumers, as being strong buyers on the dip next year, thereby providing strong support to the current rally.”
I also reached out to Edmund C. Moy, U.S. Money Reserve’s Senior IRA Strategist and the 37th Director of the U.S. Mint, for his thoughts.
Like Diehl, Moy has a lot of experience with precious metals markets, particularly experience with soaring demand: He served as Mint Director during and after the Great Recession, when demand for physical precious metals spiked. He laid out a succinct yet thorough breakdown of what he sees as the major takeaways from this report:
“The fact that global demand for gold in Q3 2024 was the highest ever at $100 billion does not surprise me.
“Basic economics tells us higher demand and limited supply equal higher prices. This is reflected by gold prices also hitting historic highs during this time.
“The key factors that helped drive gold to this record are:
- The Federal Reserve’s big interest rate cut and the expectation of future cuts
- Increased geopolitical risk
- Rebounding demand from India (now the top gold buyer in the world)
- Strong central bank buying
“Looking to Q4, I expect the factors that have driven gold demand and prices to historic highs will still be in place and will likely intensify:
Central banks, especially those from BRICS nations, will continue to buy gold—perhaps not at the record 2023 levels, but demand will continue to be strong.”
The Fed will likely cut rates again.
Geopolitical risk continues to escalate: The Russian/Ukraine war is widening, the Hamas/Israel war is widening, and Chinese aggression is widening.
India and China will buy more gold because of the seasonal holidays Diwali and the Lunar New Year.
Global gold demand seems likely to continue growing into 2025 and beyond.
We’ve only seen the data through Q3 from the World Gold Council, and 2024 is already shaping up to the best year for gold price performance since 1979.
You’ll also notice neither Mint Director is surprised that gold demand has risen so rapidly, and both foresee the level of gold demand continuing to grow.
The question to ask now is: How long can you afford to wait before adding the growth and protection of physical gold to your portfolio?
