Gold prices reached a record high in Asian trading on Wednesday, continuing a trend of recent increases driven by concerns over a tight U.S. presidential race and ongoing tensions in the Middle East, which fueled safe-haven demand.
The yellow metal’s strength persisted despite the dollar reaching a near three-month peak, as expectations grow that the Federal Reserve will slow the pace of interest rate cuts. Other precious metals have also seen significant gains recently.
Spot gold increased slightly to a record $2,750.35 per ounce, while December gold futures rose 0.2% to $2,764.15 per ounce.
Gold prices are rising primarily due to increased safe haven demand amid a tight presidential election and ongoing tensions in the Middle East. Traders are reacting to recent polling showing Republican nominee Donald Trump gaining an edge over Democrat Kamala Harris, although many analysts still view the race as too close to call.
Additionally, the situation in the Middle East, particularly Israel’s offensive against Hamas and Hezbollah, is contributing to this demand for safe assets. Despite U.S. diplomatic efforts for a ceasefire, the conflict shows little sign of de-escalation, with Israel reportedly preparing for possible actions against Iran.
This surge in safe haven demand has allowed gold to remain resilient against the pressures of a stronger dollar and rising Treasury yields.
Recent signs of resilience in the U.S. economy have led to increased expectations that the Fed will implement a 25 basis point rate cut in November, a reduction smaller than the 50 basis points anticipated in September. Additionally, traders are pricing in a higher terminal rate.
In the precious metals market, prices were mixed on Wednesday, pulling back from a recent rally. Silver futures decreased by 0.5%, settling at $34.885 an ounce, while platinum futures gained 0.5%, reaching $1,046.10 an ounce.
Meanwhile, copper prices also declined as attention turned to potential stimulus measures from China, the leading importer. A forthcoming meeting of the National People’s Congress is expected to provide more insights into fiscal spending plans later this month.
On the London Metal Exchange, benchmark copper futures dropped 0.4% to $9,587.50 per ton, and December copper futures also fell 0.4% to $4.3718 per pound. Over the past two weeks, copper prices have faced significant declines as recent stimulus announcements from China failed to meet expectations, lacking clarity on the scale and timing of the measures.
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