John Reade: Gold Price Drivers Shifting, What Will Fuel Next Leg Up?

Speaking ahead of the US Federal Reserve’s much-anticipated September meeting, John Reade, senior market strategist at the World Gold Council, shared his thoughts on where gold is in the current cycle.

‘Coming up to what is widely expected to be the start of a US rate-cutting cycle, ironically you could actually say that gold is early in the cycle. Gold typically performs pretty well when rates are cut, and if those rate cuts lead to weakness in the US dollar, which they certainly might, that could be a double tail wind helping the metal from here,’ he explained.

‘So this cycle’s been quite different, and that makes answering (the) question quite tricky.’

When asked about gold price drivers, Reade said emerging markets been top of mind this year.

However, in his view a shift could now be taking place, ‘As emerging markets are slowing somewhat, and interest rates are starting to come lower in the west, we might see a reversion to what is typically seen as the driver of gold — so slavishly following the US dollar and moves in interest rates and interest rate expectations,’ Reade said

‘I’ll reiterate — I think it’s going to be western macroeconomic factors that probably take the lead in determining gold’s direction for the balance of this year and into 2025,’ he emphasized during the conversation.

Watch the interview above for more of his thoughts on gold demand and price factors.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.