According to China Nonferrous Metals News, the Federal Reserve cut interest rates by 25 basis points as expected in October, subsequently downplaying the possibility of another rate cut in December. However, a series of data points indicate clear signs of slowing U.S. economic growth, fueling market expectations for further Fed rate cuts. The U.S. government shutdown crisis appears poised for resolution, with expectations of improved overseas liquidity. Furthermore, physical gold demand remains robust, while sustained central bank gold purchases provide long-term support for prices. Markets maintain optimism regarding the imminent end of the U.S. government shutdown, with key economic data releases forthcoming. Market focus may now shift toward macroeconomic conditions and monetary policy.
Global Central Bank Gold Purchases Bolster Prices
Recently, global central banks have accelerated their gold purchases. According to the latest data from the World Gold Council, despite record-high gold prices, total global gold demand (including over-the-counter investment) rose 3% year-on-year in the third quarter to 1,313 tons, setting a new historical high. During this period, central banks globally increased their gold acquisition pace, with net purchases totaling 220 tons—a 28% increase from the previous quarter and a 10% rise compared to the same period last year. Looking at the first three quarters as a whole, global central banks' net gold purchases totaled 634 tons, down from 724 tons in the same period last year but significantly above the average prior to 2022. China's central bank reported gold reserves of 74.09 million ounces at the end of October, an increase of 30,000 ounces month-on-month, marking the 12th consecutive month of gold accumulation. Global gold ETF holdings surged by 222 tons, while demand for gold bars and coins also rose substantially, collectively driving overall gold demand growth. Heightened geopolitical tensions, persistent inflationary pressures, and uncertainties surrounding global trade policies have all fueled investor demand for safe-haven assets.
Additionally, in September, global gold ETFs maintained robust inflows, with monthly capital inflows hitting a record high, propelling the third quarter to become the strongest on record. Significant inflows into global physical gold ETFs that month drove total assets under management up 23% month-on-month to $472 billion; total holdings rose 6% month-on-month to 3,838 tons, approaching the historical peak reached in November 2020.
Overall, these data points will directly influence next month's interest rate decision. In the short term, gold and silver prices are likely to continue their rebound. From a medium-to-long-term perspective, the fundamental logic supporting precious metals remains unchanged. U.S. monetary policy remains in an easing cycle, and prolonged monetary accommodation may further exacerbate stagflation risks. Additionally, the ongoing expansion of U.S. government debt could negatively impact the global dollar credit system, maintaining the long-term value of overweighting precious metals in portfolios.
As an integrated internet platform providing benchmark prices, on November 24, the benchmark price for silver on SunSirs stood at RMB11,891.00 per kilogram, marking a 3.62% increase compared to the beginning of the month (RMB11,476.00 per kilogram).
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