Gold prices rose in Asian trade on Tuesday, coming close to record highs as the run-up to the 2024 presidential election and uncertainty before upcoming data prints kept safe haven demand in play.The yellow metal recouped all of its losses from the prior session, as easing fears of the Middle East conflict saw gold slip from recent peaks.But safe haven demand remained bolstered by expectations of a tight U.S. presidential race, while upcoming economic prints are also likely to factor into the outlook for interest rates. Spot gold rose 0.4% to $2,753.60 an ounce, while gold futures expiring in December rose 0.4% to $2,765.50 an ounce by 00:39 ET (04:39 GMT).
Gold buoyed by election, rate jitters
Donald Trump and Kamala Harris are set for a hotly-contested election, with voting set for November 5. Recent polls and prediction markets showed Trump gaining some ground over Harris, although analysts still forecast a tighter race. Uncertainty over the outcome, which will determine U.S. politics for the next four years, kept traders largely biased towards safe havens such as the dollar and gold.Haven demand was also buoyed by anticipation of a string of key economic readings this week, which are likely to factor into the Federal Reserve’s plans for interest rates. Third-quarter gross domestic product data is due on Thursday. PCE price index data- the Fed’s preferred inflation gauge- and nonfarm payrolls data are due on Friday, with both prints coming just weeks before a Fed meeting. Gold and precious metal prices remained resilient despite recent data suggesting that the Federal Reserve may slow its rate cuts in the coming months. The central bank is anticipated to reduce rates by 25 basis points in November.Other precious metals also experienced gains on Tuesday, with platinum futures rising 1% to $1,054.00 an ounce and silver futures increasing 0.2% to $34.070 an ounce.In contrast, copper prices declined as investors looked for further economic signals from China, the largest importer of the metal. Benchmark copper futures on the London Metal Exchange dropped 0.5% to $9,510.00 per ton, while December copper futures fell 0.7% to $4.3362 per pound.Copper has faced significant losses throughout October, as recent stimulus measures from Beijing have not boosted confidence in an economic recovery. Attention is now turned to the purchasing managers’ index data from China, set to be released on Thursday, for additional insights into the economy.
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Investor sentiment was dampened by a rise in U.S. Treasury yields to three-month highs. Analysts viewed this increase as a sign that markets are beginning to anticipate that recent strong economic data and the upcoming U.S. presidential election will lead the Federal Reserve to slow down interest rate cuts.
