Gold hit an all-time peak on Tuesday as a mixture of factors including safe-haven demand spurred by U.S. election uncertainties and the Middle East war combined with expectations of further monetary easing amplified bullion’s surge.
Spot gold rose 0.7% to $2,739.40 per ounce by 10:20 a.m. ET (1420 GMT) after hitting a record $2,741.97 earlier in the session. U.S. gold futures gained 0.5% to $2,753.80.
Bullion, considered a hedge against geopolitical and economic uncertainties, has gained over 32% this year, reaching multiple record summits. Lower interest rates also raise the appeal of holding gold.
“Geopolitical tensions remain the primary driver… Two weeks out from the U.S. election, the race seems to still be a dead heat, and so a fair amount of political uncertainty is also driving safe haven interest in gold,” said Peter A. Grant, vice president and senior metals strategist at Zaner Metals.
“Certainly if things heat up further in the Middle East, we could see $3,000 before the end of the year, but I’m sort of leaning more towards Q1,” Grant said, adding that the ongoing easing path of many of the major central banks was another factor driving the rally.
Democratic U.S. Vice President Kamala Harris held a marginal 46% to 43% lead over Republican former President Donald Trump, a new Reuters/Ipsos poll found.
“The narrowing of victory odds between the Democratic and Republican presidential candidates when Kamala Harris took over as the Democratic nominee, has created outcome uncertainty, which has been gold supportive,” analysts at BNP Paribas said in a note.
From the technical point of view, the Relative Strength Index (RSI) for gold, currently at 74, suggests that gold prices moved into “overbought” territory.
Spot silver rose 2.1% to $34.47 per ounce after hitting its highest since late 2012 earlier in the session.
“We should see silver cross above $35 before the November 5th polling day, provided the tailwinds for precious metals remain intact,” said Han Tan, chief market analyst at Exinity Group.
Platinum rose about 1.8% to $1,021.45 per ounce. Palladium added 2.2% to $1,073.75.
