Gold Hits Record Highs Approaching $2,730 Amid US Election Uncertainty

 

 

During the Asian session, propelled by a surge in safe-haven demand, the price of gold has reached unprecedented heights. On one front, with only a few weeks remaining until the U.S. presidential election, and on the other, the European Central Bank's rate cuts have provided a boost. Despite robust U.S. retail sales and labor market data, they have merely reduced the probability of significant rate cuts without altering the trend toward further easing.

 

As of 13:33 Singapore time (01:33 Eastern Time), data from Investingcom shows that spot gold prices have risen by $18.93 or approximately 0.71%, reaching $2711.86 per ounce, hitting a historical high of $2712.43 at one point. Gold futures prices have also surged by $20 or around 0.74%, reaching $2727.55 per ounce, with an intraday high of $2727.60, setting a new record.

 

 

 

 

As the U.S. election draws near, gold has broken out of the narrow trading range of the past two weeks, setting new highs.

 

 

Recent polls indicate a neck-and-neck presidential race between Vice President Harris and former President Trump, with less than three weeks remaining until Election Day. The stark differences in the candidates' positions further exacerbate the uncertainty surrounding the election outcome.

 

 

While media polls show Harris slightly ahead of Trump, forecasts and betting markets lean towards a Trump victory, intensifying the uncertainty.

 

 

Ongoing conflicts in the Middle East have sustained gold's appeal as a safe-haven asset.

 

 

 

Despite the dollar's strength, reaching a new high in 2.5 months, gold prices remain firm.

 

The dollar has been bolstered by better-than-expected retail sales data, along with a separate report showing a decline in weekly jobless claims, indicating a robust labor market. These data further reinforce the market's expectation of smaller rate cuts by the Federal Reserve in the coming months.

 

However, the ECB's 25-basis-point rate cut suggests that major central banks globally are still prepared for further easing, and a low-rate environment could support gold and other non-yielding assets. "Precious metals have found support from the ECB's rate cut, reminding the market that most central banks have entered an easing mode. This helps shield them from the impact of economic data, which could slow the Fed's rate-cutting cycle," wrote analysts at ANZ Bank in a report, emphasizing that gold's safe-haven demand remains intact.

 

 

Performance varies among other precious metals. Platinum futures remain steady at $1,005.95 per ounce, while silver futures have risen by 1% to $32.095 per ounce.

 

In the industrial metals sector, copper prices held steady on Friday but are expected to decline for the third consecutive week as China, a major copper importer, has implemented stimulus measures that fell short of market expectations.