Gold prices reached a record high yesterday, with safe-haven demand continuing to support prices as traders monitored escalating tensions in the Middle East and the increasingly tight US presidential election race.
Bullion climbed to an all-time high of about US$2,732.82 an ounce, topping last week’s peak by a few dollars. The bullish sentiment has also spilled over to silver, which was trading at the highest since 2012, while palladium and platinum also rose.
Meanwhile, oil prices edged higher following a more than 7 percent drop last week, with Brent crude futures up 1 percent at US$73.76 a barrel, and US West Texas Intermediate crude futures up 1.17 percent to US$70.74 a barrel.
Photo: Bloomberg
Markets are focused on geopolitical risks in the Middle East, with Israel discussing its next attack on Iran after a Hezbollah drone exploded next to Israeli Prime Minister Benjamin Netanyahu’s private home on Saturday.
US President Joe Biden and his administration have urged the renewal of ceasefire negotiations in the region, although Israeli hardliners oppose concessions.
Traders were also repositioning portfolios ahead of the US election on Nov. 5.
Polls show the contest between former US president Donald Trump and US Vice President Kamala Harris could be the closest in a generation. Investors typically seek safety in gold in times of geopolitical and economic uncertainty.
Gold futures might rise to average US$3,000 an ounce in the fourth quarter of next year, Commonwealth Bank of Australia analyst Vivek Dhar said in a note on Monday.
The US Federal Reserve’s rate-cutting cycle would likely drive weakness in the US dollar, he added. A lower greenback makes bullion cheaper for many buyers, as it is priced in the US currency.
Bullion is one of this year’s strongest performing commodities, with gains of more than 30 percent so far this year. Rate-cut optimism fueled the most recent advances as the Fed kicked off its easing cycle last month. Robust central bank buying has also been a long-standing pillar of support for gold prices.
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