Gold prices surged to a record high in Asian trade on Monday, driven by uncertainty over the U.S. election and anticipation of Israel’s retaliation against Iran. This rally in gold was accompanied by a rise in other precious metals, with silver reaching a 12-year peak and copper prices firming up after an interest rate cut in China.
The dollar remained strong, but metal prices continued to climb as traders speculated on the Federal Reserve’s pace of interest rate cuts. Gold rose 0.4% to $2,732.86 an ounce, while silver jumped 3.1% to $34.328 an ounce, and copper prices also saw gains.
Safe Haven Demand Boosts Precious Metals
Increased safe haven demand drove the surge in precious metal prices, fueled by tensions in the Middle East and uncertainties surrounding the upcoming U.S. presidential elections. Reports of potential strikes by Israel against Iran and ongoing hostilities in the region added to the bullish sentiment.
Analysts noted that the race between Donald Trump and Kamala Harris was too close to call, leading traders to seek safe haven assets. This demand overshadowed concerns about the U.S. economy and expectations of slower rate cuts by the Fed in November.
Copper Rallies on China’s Rate Cut
Copper prices also saw a boost after China announced a rate cut, signaling further stimulus measures to support the economy. Benchmark prices for copper rose on the London Metal Exchange, reflecting optimism among traders.
While earlier stimulus signals had not met expectations, the latest rate cut by China provided a much-needed boost to copper prices after a week of losses.
In conclusion, the surge in gold and other metal prices can be attributed to a combination of factors, including geopolitical tensions, uncertainties surrounding the U.S. election, and stimulus measures in China. Investors should monitor these developments closely and consider diversifying their portfolios to hedge against market volatility.