In a conversation with the Investing News Network, Joe Cavatoni, senior market strategist, Americas, at the World Gold Council, broke down the organization's latest gold demand trends report.
Aside from key demand drivers like central bank buying, he highlighted differing sentiment in the west and east.
"This is an interesting time. Right now the price has been impacted less so by the expectation of US rates and the US dollar, and more so by the geopolitical and overall outlook for investment in the Asian markets, the eastern markets. And that's actually done a real shift in the overall sentiment amongst investors worldwide," Cavatoni said.
He went on to explain that western investors generally tend to pile into gold when the metal's price is high. Now, however, they're standing on the sidelines waiting for interest rates to start coming back down.
Conversely, eastern investors, who would normally rein in purchases when prices are higher, continue to buy. Cavatoni pointed to currency and property sector concerns in China as part of the reason this is happening.
Overall, he sees more room for gold to run after its record-setting moves earlier this year.
“The upside potential has been really exciting to watch, but definitely something that is giving us a signal that there might be more than just strategic investment at play. Likely some speculative investment playing out as well, whether that's in the Americas or actually overseas in Asia. It's really something that we're keeping a close eye on," he said.
In closing, Cavatoni recommended keeping an eye out for black swan situations and the US election.
"I always remind people to never underestimate the risk of a systemic event, whether it's geopolitical or whatever the case may be ... Don't overlook the fact that there's a lot of pressure on financial institutions, banks, et cetera," he said. "But what I'd also add and make sure people pay close attention to is that there's an election year taking place in the US."
Watch the interview above for more from Cavatoni on gold demand, plus overall market trends.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.