Gold Prices Hit Record High Amid Tight U.S. Presidential Race and Middle East Tensions
Gold prices reached a record high in Asian trade on Wednesday, driven by anticipation of a close U.S. presidential race and ongoing tensions in the Middle East. Despite the dollar hitting a near three-month high, the yellow metal continued to strengthen, supported by safe haven demand.
Gold rose to $2,750.35 an ounce, while December futures climbed to $2,764.15 an ounce. Other precious metals also saw gains in recent sessions.
The surge in gold prices was fueled by increased safe haven demand as traders prepared for a closely contested presidential election. With Republican nominee Donald Trump gaining ground over Democrat Kamala Harris in polls and prediction markets, analysts believe the race is too close to call.
Tensions in the Middle East, particularly between Israel and Hamas/Hezbollah, further boosted demand for safe havens. Despite efforts by U.S. diplomats to negotiate a ceasefire, the conflict showed no signs of de-escalation, with Israel reportedly planning a retaliatory strike against Iran.
Despite a stronger dollar and positive economic indicators in the U.S., safe haven demand for gold prevailed. Traders expect the Federal Reserve to cut rates by 25 basis points in November, a smaller reduction than the 50 bps cut in September, with a higher terminal rate also being factored in.
In contrast, other precious metals saw mixed performance on Wednesday, with silver falling 0.5% to $34.885 an ounce, and platinum rising 0.5% to $1,046.10 an ounce.
Meanwhile, copper prices retreated amid focus on potential stimulus measures in China, the world’s largest copper importer. The National People’s Congress meeting later this month is expected to provide more clarity on fiscal spending, influencing the direction of copper prices.
Overall, the record high in gold prices reflects the uncertainty surrounding the U.S. presidential race and geopolitical tensions, highlighting the importance of safe haven assets in times of market volatility. Investors should closely monitor these factors to make informed decisions about their portfolios and risk management strategies.