Gold prices hit a record high on Tuesday, as uncertainties surrounding the US presidential election and the Middle East conflict, along with expectations of an interest rate cut by the Federal Reserve, boosted bullion’s appeal.
Spot gold was up 1% at USD 2,769.25 per ounce as of 10:17 a.m ET (1417 GMT), after hitting a record high of USD 2,772.42 earlier in the session.
US gold futures settled 0.9% higher at USD 2,781.1.
Bullion thrives in a low interest-rate environment and is considered a hedge against market volatilities. Gold prices have surged more than 34% so far this year.
Gold is supported by safe-haven bets as geopolitical tensions and political uncertainty continue, with Japan now being added into the mix on the political uncertainty front after the weekend election, said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Republican former US President Donald Trump and Democratic Vice President Kamala Harris are also caught in a tight race for the White House.
On the geopolitical front, at least 93 Palestinians were killed or missing in an Israeli strike in northern Gaza, the Gaza health ministry said.
Investors await a series of economic data, including ADP employment, US Personal Consumption Expenditures, and payrolls report to further gauge the Fed’s policy stance, with its next rate decision on Nov. 7.
Markets are currently pricing in a 98% chance for a 25-basis-point rate cut by the Fed in November.
“Gold should retain its upward bias and may even flirt with $2,800 in the days ahead, as long as U.S. election risks continue weighing on market sentiment, while Fed rate cut expectations remain intact,” said Han Tan, chief market analyst at Exinity Group.
Gold prices’ rally is set to extend into 2025, as a favourable U.S. interest rate backdrop and geopolitical tensions continue to burnish its appeal, a Reuters poll showed.
However, buyers in India brushed off record high prices, making purchases for the Dhanteras and Diwali festivals.
Spot silver rose 1.9% to USD 34.32 per ounce. Platinum rose 1.6% to USD 1,049.10. Palladium rose 0.2% to USD 1,221.00, after hitting a 10-month high on sanction concerns on top producer Russia.
(Reporting by Anjana Anil and Anushree Mukherjee in Bengaluru; Additional reporting by Sherin Varghese, Editing by Shilpi Majumdar and Shailesh Kuber)
This article originally appeared on reuters.com