Oct 23 2024: Gold prices reached a record high in Asian trading on Wednesday, continuing their upward trend as concerns over the tight U.S. presidential race and ongoing Middle East tensions fueled demand for safe-haven assets.
Despite the dollar reaching near three-month highs on expectations of slower Federal Reserve rate cuts, gold and other precious metals saw significant gains in recent sessions.
Spot gold rose slightly to an all-time high of $2,750.35 per ounce, while December gold futures edged up 0.2% to $2,764.15 per ounce.
Election and Geopolitical Risks Push Safe-Haven Buying
Gold’s gains were mainly attributed to increased safe-haven demand amid concerns over the upcoming U.S. presidential election. Recent polls indicate that Republican candidate Donald Trump is gaining an edge over Democratic nominee Kamala Harris, though analysts still view the race as too close to call with two weeks until the vote.
In addition to election uncertainty, geopolitical risks in the Middle East bolstered demand for gold. Israel’s continued offensive against Hamas and Hezbollah, combined with reports of a potential retaliatory strike on Iran, has heightened tensions. While U.S. diplomats push for a ceasefire, no signs of de-escalation have yet emerged.
Despite a stronger dollar and rising Treasury yields, gold remained resilient as investors sought safety.
Fed Rate Expectations and Mixed Precious Metal Performance
Recent indications of strength in the U.S. economy have led to expectations that the Federal Reserve will implement a smaller 25 basis point rate cut in November, compared to the 50 bps reduction in September. Markets are also pricing in a higher terminal rate.
Other precious metals had a mixed performance on Wednesday. Silver futures dropped 0.5% to $34.885 per ounce, while platinum futures gained 0.5% to $1,046.10 per ounce.
Copper Falls as China Stimulus Measures Disappoint
In industrial metals, copper prices declined on Wednesday as markets awaited additional stimulus measures from China, the world’s largest copper importer. Investors are focusing on the upcoming National People’s Congress, which may provide further details on fiscal spending.
Benchmark copper futures on the London Metal Exchange fell 0.4% to $9,587.50 per ton, while December copper futures dropped 0.4% to $4.3718 per pound. Copper has been under pressure in recent weeks, with disappointment over the limited scope and unclear timeline of China’s stimulus efforts.
