With $6 trillion sitting idle in U.S. money market funds, two World Gold Council strategists see a continuing upside for the yellow metal, which experienced a sizable rally to all-time highs in 2024.
But they’re also hearing about some regret from those who missed the move.
“I’ve been visiting private banks in (Switzerland), some of your typical gold buyers for a very long time, and what I’m hearing is a lot of positivity to gold,” said John Reade, market strategist at World Gold Council. “But, one of the things that keeps coming through is people don’t have as much gold as they’d like to. It’s gone much further than people were expecting so either investors or holders missed the opportunity completely, or in some cases like the private banking community, they were writing positions against their gold holdings for premiums, and it was called away.”
A lot of money out there
Fellow WGC Market Straegist Joseph Cavatoni said that may present an opportunity for the trillions of dollars that are sitting on the sidelines to move into the precious metals market.
Gold traded around $2,620 an ounce on Wednesday. (Source: TradingView)
“There’s a lot of pent-up demand and cash on the sidelines,” he said. “That’s money that needs to find a place to go and I think money like that will be very interested in taking a look at gold as a diversifier, how it can play out as a portfolio allocation in a rate-cutting environment regardless of landing.”
What kind of a landing is coming?
As economics continue to bicker about whether or not the global markets will see a “soft” or “hard” landing, Cavatoni said there’s also the possibility for “no” landing.
“A lot of people are talking about that,” he said. “There are strong points in the economy and things are pumping on all cylinders and I think that’s an interesting dynamic.
Both strategists said they feel the most recent jobs report has pressured the price of gold in the short term, but reminded listeners of the “Unearthed” podcast that the global economy remains in a rate-cutting environment.
“The consensus is the rate cutting direction continues to be in the right way to support gold, but expectations between half-point and quarter-point cuts have been paired back for November and December,” Cavatoni said. “That’s the key element at play that will keep bringing Western investors looking at where their money needs to be and why gold needs to be the diversifier.” Augusta Precious Metals $0 (10 Years) $50,000 "Best Overall" by Money Magazine, Award-Winning for 6 Years, Thousands of 5-Star Rankings Goldco Vary $25,000 Industry leader with over $2 Billion in gold and silver. Top rated precious metals company with buy back guarantee American Hartford Gold Vary $10,000 American Hartford Gold, ranked #1 Gold Company on Inc. 5000, boasts thousands of A+ BBB ratings and 5-star reviews, endorsed by Bill O'Reilly and Rick Harrison..Expand Details
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