Gold prices rose on Tuesday and moved near the record highs reached in the previous session amid uncertainty surrounding the U.S. elections, ongoing tensions in the Middle East, and expectations that central banks will cut interest rates.
Spot gold prices rose 0.6% to $2,735.14 per ounce at 06:58 GMT, while U.S. gold futures increased by 0.4% to $2,749.30.
Bullion, considered a hedge against geopolitical and economic uncertainties, hit an all-time high of $2,740.37 on Monday and has increased by more than 32% this year.
“A confluence of tailwinds remains in place, which includes its (gold’s) status as an attractive hedge against U.S. election uncertainties and geopolitical risks, resilient central banks’ demand, and room for catch-up ETF buying,” said market strategist Yeap Jun Rong from IG.
“Buyers may seem to eye the $2,800 level next, as political uncertainties will persist as the election draws nearer.”
With just over two weeks until the U.S. presidential election, former President Donald Trump and Vice President Kamala Harris are embroiled in a fierce battle for victory in several key swing states.
Recently, Israel assassinated leaders of Hezbollah in Lebanon and Hamas in Gaza, with no signs of restraint on the ongoing ground and air attacks.
Increasingly tense political and social instability has led investors to turn to gold as a safe-haven asset, continuously driving prices higher.
Many analysts believe there is a strong likelihood that the Federal Reserve will cut interest rates by 25 basis points in November.
This has a significant impact on gold prices both now and in the future when the news is announced.
