Precious metals analysts have indicated that the U.S. election and geopolitical risks may drive gold prices higher in the short term and by 2025, but the impact of high prices and increased supply should end the gold rally later next year.

HSBC stated in a recent research report that gold is enjoying several strong tailwinds, a situation that should persist into next year. They wrote: "Our precious metals analysts believe that gold has entered a new pricing pattern, and with the support of various bullish factors including 'safe-haven' demand triggered by geopolitical risks and economic uncertainty, gold prices may remain above $2,200 per ounce." "The increasing fiscal deficit is also encouraging demand for gold. Global monetary easing policies and expectations for further easing have increased speculative demand for gold."

HSBC analysts anticipate that the rebound in the second half of 2025 will slow down as the impact of high prices and increased supply on the market takes effect. They said: "As we move into 2025, a combination of physical and financial market factors may suppress the rebound, and by the end of 2025, gold prices may moderately decline." "In the physical market, high gold prices are driving a complete decline in the purchase of gold jewelry, while demand for gold coins and bars is also decreasing. Meanwhile, global gold production is on an upward trend for at least this year and next, with the mining industry being the largest single source of new supply to the market."

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They added: "High gold prices also stimulate the scrap supply of gold." "In other words, gold may face the adverse factors of weak demand for jewelry, gold bars, and coins, as well as increased mine supply and recycling levels."

Analysts also warned that they believe gold-backed exchange-traded funds (ETFs) will continue to liquidate their holdings of gold, "and central bank demand may also slow down in the face of high prices."

On Friday morning, spot gold prices traded within a $20 range after opening at a high of over $2,736 per ounce. Spot gold last traded at $2,729.59 per ounce, down 0.24% for the session.