Among the key questions regularly posed by both commentators and the media during the third quarter of 2024 was not, as is frequently the case, ‘Which way is the gold price going to move?’, but instead, ‘How far is the price going to rise?’, and, moreover, ‘Why?’ The questions were usually accompanied by a significant amount of post hoc rationalisation which, in some cases, included recommendations to buy even though gold had already achieved dramatic gains through the year.
To take an example: from the beginning of 2024 through to 2 September, the gold price rose by 20.42% from US$2,074.90 (a.m.) to US$2,498.60. At this point, Goldman Sachs predicted that “gold has the highest potential for a near-term price hike” (by comparison to equities or other commodities) - a bold statement which, at the time, might have been unkindly viewed as a case of jumping on the bandwagon.
But Goldman Sachs was not wrong. During September’s remaining 20 trading days, gold gained a further 5.26% to finish the quarter at US$2,629.95, having broken through US$2,600 for the first time ever during 20 September’s morning auction - a move which equated to a gain of +12.98% in Q3 and +26.75% for the year-to-date (during the same period, the S&P500 Index rose 21.5%).
Taking a longer timeline and counting from gold’s recent low of US$1,618.20 at the end of Q3 2022, (28 September) - when COVID-19 was still with us, the Russia-Ukraine war was in full force, and interest rates were at rock-bottom - the rise to now, during those eight subsequent quarters, was 62.5%. That’s a compound gain of over 6% per quarter.

Numbers for the chart: Q4 2022: 8.93% - Q1 2023: 7.88% - Q2 2023: 2.59% - Q3 2023: 2.26% - Q4 2023: 12.59% - Q1 2024: 6.72% - Q2 2024: 2.93% - Q3 2024: 12.98%
Turning specifically to Q3 2024, the daily wire service reports on the gold price tended to concentrate almost exclusively on the Fed and the US economy, and, in particular, the prospects of the US rate cut which finally occurred on 18 September.
This cut (which followed downward rate moves in the quarter by the Bank of England on 16 August and the European Central Bank on 12 September) had been flagged almost ad nauseam by economists the world over with the result that fixed income and equity markets largely took it in their stride. However, gold, probably reacting to the fact that the cut was 50bps rather than 25bps, which many had anticipated, jumped 1.39% from 18 September (p.m.) to 20 September (a.m.) and in so doing hit an all-time high of US$2,606.45 (a.m.)
This record price was one of a series achieved in September as the gold price rose through the month (see table).
Gold: Record Highs, September 2024 | A.m. Auction | P.m. Auction |
---|---|---|
12 Sep | US $2,545.95 | |
13 Sep | US $2,571.35 | US $2,575.10 |
14 Sep | US $2,587.45 | |
19 Sep | US $2,590.60 | |
20 Sep | US $2,606.45 | |
23 Sep | US $2,617.25 | US $2,629.95 |
24 Sep | US $2,635.95 | |
25 Sep | US $2,653.80 | US $2,661.45 |
26 Sep | US $2,668.90 |
That said, it was clear to almost all analysts and commentators that the strength of gold’s move during the quarter could not be exclusively attributed to actual and anticipated interest rate moves, although concerns about an economic downturn or recession certainly made an important contribution. For example, fears of currency devaluation early in the quarter led to what the media described as a ‘gold buying frenzy’ in Thailand and Vietnam.
More importantly, geopolitical issues - in particular the frightening spread of the Middle East conflict to include Israeli attacks on Lebanon and, latterly, direct involvement from Iran - led large numbers of investors, at both a retail and institutional level, to take refuge in gold as a safe haven; both Asian family offices and Western ETFs were cited as being exceptionally active.
Meanwhile, the retail market in India was dramatically boosted by its government’s move on 23 July to slash import taxes on gold (and silver) in an attempt to combat smuggling. However, by the end of the September, the rising gold price (which, valued in rupees, gained 14.5% during the quarter) led to a decline in retail interest. And not just in India. As Robin Kolvenbach, co-CEO of Argor-Heraeus, quoted by Reuters, put it: "Physical demand in general is super low everywhere now. There was a spike in demand in August when India cut its import duty, but since then it has gone completely dead again."
Finally, buying by central banks also continued to make a positive impact on the market although less marked than earlier in the year. According to the World Gold Council: “Central banks have continued to accumulate gold in August [the latest figures available] with reported net purchases of 8t. While overall demand has tapered from the early 2024 highs, accumulation of gold reserves remains positive, with activity concentrated in emerging market (EM) central banks. August net purchases were the lowest since March when central banks reported a net sale of 2t; it was also well below the 12-month average of 33t.
“On a y-t-d basis EM central banks account for 70% of total reported net purchases with Turkey making up 25% of overall central bank buying thus far.”
Silver
Buoyed by steady global economic growth, predicted by the IMF (via the World Economic Outlook) to be 3.2% in 2024 and 3.3% in 2025, and reacting to geopolitical issues, silver’s dual status as a store of value and industrial metal led to it outpace gold during 2024 year-to-date.
Specifically, the silver price rose 29.78% to end September (gold: 26.75%). Most of this move, however, occurred in Q2 (12.98%) with 6.26% (US$29.245 to US$31.075) being added in Q3 (when gold, by comparison, gained 12.98%).
From the industrial standpoint, one very bright light (pun intended) is the growing demand for silver from manufacturers of solar panels. The Silver Institute (quoted by Metals Daily) “reports that solar-related demand skyrocketed 158% from 2019 to 2023, with expectations of an additional 20% growth this year. This surge is attributed to the global push for clean energy and electrification, where silver plays a crucial role.”
Equally, and despite a relatively sluggish economy brought on by weakness in its property sector, China is reported to be becoming an increasingly major presence in the silver market. It will be interesting to see how the massive economic stimulus announced at the beginning of October, estimated to be worth US$1.07 trillion (if all the measures are enacted), impacts the global market. Certainly, Citi Research is bullish, predicting prices as high as US$40 by mid-2025 (levels not seen since mid-2011).
Vault Holdings
As at end August 2024, the amount of gold held in London vaults was 8,675 tonnes (a 0.3% increase on previous month), valued at $701 billion, which equates to approximately 694,021 gold bars.
There were also 26,245 tonnes of silver (a 1.4% decrease on previous month), valued at $24.9 billion, which equates to approximately 874,847 silver bars.
Gold - Q3 2024 | 2024 YTD | ||
---|---|---|---|
Performance 1 Jul – 30 Sep | +12.98% | 2 Jan – 30 Sep | +26.75% |
Price High – 26 Sep a.m. | $2668.90 | Price High – 26 Sep | $2668.90 |
Price Low – 1 Jul a.m. | $2327.80 | Price Low – 14 Feb p.m. | $1985.10 |
Low/High Range | 14.65% | Low/High Range | 34.45% |
Weekly Volume High | 291.1mn toz | Weekly Volume High | 291.1mn toz |
Weekly Value High | $771.6 bn | Weekly Value High | $771.6 bn |
Average Daily Volume | 52.2 mn toz | Average Daily Volume | 45.3 mn toz |
Average Daily Value | $129.3 bn | Average Daily Value | $104.8 bn |
Silver - Q3 2024 | 2024 YTD | ||
---|---|---|---|
Performance 1 Jul – 30 Sep | +6.26% | 2 Jan – 30 Sep | +29.78% |
Price High – 26 Sep | $32.480 | Price High – 26 Sep | $32.480 |
Price Low – 08 Aug | $26.930 | Price Low – 14 Feb | $22.085 |
Low/High Range | 20.60% | Low/High Range | 47.07% |
Average Daily Volume | 433.6 mn toz | Average Daily Volume | 410.2 mn toz |
Average Daily Value | $12.8bn | Average Daily Value | $11.4 bn |