No significant changes were noted in the price of gold on Monday morning. The dynamics are very weak since, in the run-up to the presidential election, market participants do not risk taking premature steps. Caution is now common in almost all markets, but precious metals are particularly sensitive to any changes.
The price of gold futures contracts for December delivery rose slightly by 0.08% or $1.45, which sent it to the limits of $1881.4 per troy ounce. At the same time, the silver futures contract for December delivery increased its value more substantially by 1.43%, which allowed it to reach $23.985 per troy ounce.
Gold is in no hurry to gain momentum, as the results of the US presidential election are still a mystery, and the two main candidates are moving almost parallel. In this regard, it is extremely rash to jump to conclusions, given the weak dynamics in the precious metals market.
However, besides the elections, there is one more positive factor for the market - the uncertainty around the new program of financial incentives in the US. While the question remains open, precious metals have a chance to add well. Meanwhile, the two opposing sides still have not come to an agreement, which only heightens the interest of investors.
Most analysts are inclined to believe that in the near future, the precious metals market will face a bullish trend since a large number of stimulating factors have accumulated around it. In addition, the long-term growth outlook is also quite justified against the background of the need to eventually ratify a package of stimulating financial measures, which will have a negative impact on the national currency, which in turn will be a positive and growth point for gold.
In the meantime, the US dollar feels normal: it is strengthening quite well, which makes the precious metals market nervous.
The physical purchases of gold are skyrocketing. According to statistics for the third quarter of this year, private investors have begun to buy gold bars and coins even more actively. According to the latest data, physical purchases increased by more than 222 tons, which indicates an increase of one and a half times compared to last year's similar indicators.
Such a significant increase in demand and physical purchases is primarily due to the active recovery of countries ' economies after the first wave of the coronavirus pandemic, as well as the lifting of restrictive measures in the summer of this year. The supply chain was re-established, which led to more frequent and voluminous purchases. However, the second wave of the pandemic threatens this trend.
China remains the largest consumer of gold in the world. Private investors from this country bought about 60.5 tons of gold in the third quarter. This is 36% more than last year. For the first time in history, Turkey was on the second line in terms of consumption, its investors bought out 48 tons of gold, which is seven times more than the previous value.
As long as gold is so popular, there won't be any big threats to its value. However, market participants and analysts still do not undertake to make long-term forecasts for the precious metals market, since the coronavirus pandemic can make significant adjustments. Nevertheless, metals are holding up well, and there are fewer market pressures than in other sectors.
