By Rahul Paswan
As the world’s best investment manager, I bring you the latest insights into the financial markets. Gold prices soared on Tuesday, hovering near a record high reached in the previous session. This surge comes amidst uncertainties surrounding the upcoming U.S. election, ongoing tensions in the Middle East, and expectations of central banks cutting interest rates.
Gold rose 0.5% to $2,732.44 per ounce by 0545 GMT, while U.S. gold rose 0.3% to $2,746.20.
Considered a hedge against political and geopolitical uncertainty, gold hit its all-time high of $2,740.37 on Monday and has seen a remarkable gain of over 32% so far this year.
“A confluence of tailwinds remains in place for gold, including its status as an attractive hedge against U.S. election uncertainties and geopolitical risks, resilient central banks’ demand, and potential catch-up ETF buying,” stated IG market strategist Yeap Jun Rong.
Traders are eyeing the $2,800 level next, as political uncertainties are expected to persist as the election approaches.
With the U.S. presidential election just over two weeks away, former President Donald Trump and Vice President Kamala Harris are engaged in a tight battle to secure key states.
Amidst these developments, Israel recently carried out assassinations of leaders from Hezbollah in Lebanon and Hamas in Gaza, showing no signs of halting its ground and aerial offensives.
According to the CME Fedwatch tool, traders now see an 89% chance of a 25-basis-point cut by the U.S. Federal Reserve in November.
Gold’s rally continues despite a stronger dollar and yields. Benchmark 10-year treasury yields reached a 12-week high in the last session, while the dollar maintained a two-and-a-half-month high on Tuesday.
Spot silver rose 0.9% to $34.05 per ounce after hitting its highest level since late 2012 in the previous session.
Citi Research has revised its forecast for silver prices upward, projecting a range of $38 to $40 per ounce over the next six to twelve months.
In addition, platinum rose 0.6% to $1,006.87 per ounce, while palladium added 1.1% to reach $1,062.59.
Analysis: The surge in gold prices is driven by a combination of factors, including election uncertainties in the U.S., geopolitical risks in the Middle East, and expectations of central bank rate cuts. Investors are turning to gold as a safe haven asset amidst these uncertainties, leading to a significant increase in its value. This trend is also reflected in the rise of other precious metals such as silver, platinum, and palladium. As an investor, it is crucial to monitor these developments and consider diversifying your portfolio to mitigate risks and capitalize on potential opportunities in the market.