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Due to the uncertainty of the outcome of the U.S. presidential election, as well as the Middle East tensions intensified prompted investors to increase the demand for safe-haven assets, the price of precious metal hit another record high on Thursday.
The spot gold price hit US$2,696.62 per ounce during the session, and the price of the most active Comex gold futures contract closed at US$2,704.80 per ounce.
The most direct impetus for the price rise came from tensions in the Middle East, where the conflict between Israel and Lebanon is nearly out of control, causing investors to seek gold as gold quickly rose to a high of $2,696 after Israel announced it had killed Hamas leader Yahya Sinwar.
Lukman Otunuga, senior research analyst at FXTM, said that with the US election less than three weeks away, the market is likely to remain cautious. But uncertainty over the election results has fuelled market demand for safe-haven assets such as gold.
From investors’ point of view, both current US presidential candidates will bring different risks to the economy, and as portfolios are adjusted to cope with potential market volatility, the gold price could be given the opportunity to continue to reach record highs, regardless of a Trump or Harris victory.
Since the beginning of the year, the price of gold has risen by more than 30 per cent, and in addition to the boost from safe-haven demand, the shift in monetary policy towards easing by European and American central banks has also been a major driver of the rise in the price of gold As interest rates fall, gold as a non-interest-bearing asset is becoming more attractive to investors.
ECB Governing Council policymakers unanimously decided to cut the overnight deposit rate by 25 basis points today, to 3.25% This is the third consecutive rate cut by the ECB since it began cutting rates in June this year.
Earlier this week, delegates of the London Bullion Market Association (LBMA) predicted that the price of gold is expected to rise further to $2,941 per ounce over the next 12 months.
Ole Hansen, head of commodities strategy at Saxo Bank, said that a London Bullion Market Association survey released earlier this week showed that the underlying expectation for gold prices is for them to rally to near $3,000 over the next year, while silver is likely to fare better.
Bob Haberkorn, senior market strategist at RJO Futures, noted on Thursday, “I think the Fed wants to lower rates further, and the odds are that they’ll cut rates at least another 25 basis points before the end of the year The continued lowering of interest rates is certainly good for gold.”
