Gold prices have surged to a new record, driven by the approaching U.S. presidential election and escalating tensions in the Middle East, increasing demand for safe-haven assets. The price of gold hit an all-time high of $2,742.08 per ounce, surpassing the previous day's record. Concerns over a tightly contested U.S. election and the risk of a broader conflict in the Middle East have pushed traders towards gold.
Strong central bank purchases and expectations of U.S. interest rate cuts have further supported gold's significant rise this year. While some Federal Reserve officials advocate for a slower pace of rate cuts, others anticipate continued reductions. These factors contribute to gold being one of the best-performing commodities of the year, with gains exceeding 30% due to rate cut expectations, substantial central bank buying, and robust Asian demand.
Amidst the growing geopolitical risks and uncertainty before the U.S. election, fund managers have increased their net long positions in gold, and investors continue to expand their holdings in gold exchange-traded funds. Citigroup analysts have raised their three-month gold price forecast by 3.7% to $2,800 per ounce, expecting further deterioration in the labor market to drive demand.
Though the outcome of the U.S. election remains uncertain, gold and silver are increasingly seen as a trade betting on a Republican victory.
