Has the Gold Bull Market Ended?

The gold market has been on a remarkable run, with prices surging over 33% since the beginning of 2024. Central bank gold purchases and ETF inflows have been significant drivers of this bull market, with global gold demand surging 5% year-on-year to a record 1,313t in Q3 2024. However, recent data suggests a potential slowdown in central bank purchases and a decline in bar and coin investment. As we approach the end of the year, investors are wondering if the gold bull market has reached its peak.

Geopolitical tensions and inflation expectations have been key drivers of gold's bull market. However, recent shifts in these factors may signal a potential end to the bull run. Central bank buying and ETF inflows have been major contributors to this growth, but recent data shows a slowdown in central bank purchases and a decline in bar and coin investment. Additionally, the US election and the Fed's monetary policy decision may impact gold prices.



Gold's unique dual attributes as a currency and precious metal have significantly impacted its pricing and demand dynamics. As a monetary attribute, gold's supply is relatively rigid, unaffected by sovereign credit expansion. Meanwhile, its precious metal attribute makes it widely accepted as a "hard currency" worldwide, exhibiting anti-inflation and credit risk-resistant characteristics. These factors have contributed to gold's inverse relationship with the US dollar, providing it with a natural safe-haven function. However, the paradigm shift in the relationship between gold prices and interest rates, driven by the accelerated transformation of the macroeconomic paradigm in the post-pandemic era, suggests that the traditional gold pricing model may be re-calibrated.

In conclusion, while the gold bull market has been impressive, recent data suggests a potential slowdown in central bank purchases and a decline in bar and coin investment. Geopolitical tensions and inflation expectations have been key drivers of gold's bull market, but recent shifts in these factors may signal a potential end to the bull run. Gold's unique dual attributes as a currency and precious metal have significantly impacted its pricing and demand dynamics, but the paradigm shift in the relationship between gold prices and interest rates suggests that the traditional gold pricing model may be re-calibrated. As we approach the end of the year, investors should closely monitor these trends and adjust their portfolios accordingly.