Joe Cavatoni discusses the unprecedented demand for gold in the third quarter, highlighting that it hit a record high. Part of the reason for this surge is cited as the resurgence of Western Exchange-Traded Fund (ETF) buyers, who are actively purchasing again.
In the middle of all this activity, Cavatoni illuminates several contributing factors for the uptick in demand for gold. This includes an uncertain global economy due to the ongoing COVID-19 pandemic, as well as the prevalent chaos in traditional markets, causing investors to seek the security of gold as a stable asset.
Moreover, he notes that technology also played a role in bolsterifying this demand. Digital platforms have made it easier for individuals and small investors to purchase gold, thereby broadening the market.
Cavatoni also points to the influence of government policies. Central banks worldwide continue to support economic health with decades-low interest rates and quantitative easing, causing inflation concerns that usually drive investors towards gold.
Lastly, Cavatoni notes that Western ETF buyers, who had been on the sidelines, are noticeably back in action. This resurgence of western buyers, coupled with robust demand from traditional strongholds such as India and China, has led to the record-breaking demand in Q3.
In conclusion, Cavatoni’s analysis implies that a combination of global economic uncertainty, technological advances, government policies, and greater market participation from western buyers are the central drivers of the record-breaking gold demand in Q3. This trend is likely to continue considering the ongoing global economic vulnerability.
