Gold prices reached a record high on Wednesday, buoyed by strong demand for safe-haven assets as investors closely monitor the upcoming US election and ongoing conflicts in the Middle East. The price of bullion climbed to $2,750.34, surpassing Tuesday’s peak by about $1, with traders increasingly concerned that tensions between Israel and Iran could escalate into a larger conflict. This bullish sentiment has also positively impacted the broader precious metals market, pushing silver close to $35 an ounce, a level it hasn’t seen since 2012.
The demand for gold has helped counterbalance recent selloffs in US government bonds, as traders anticipate a slower pace of interest rate cuts by the Federal Reserve. Typically, higher yields and tighter monetary policy can pressure gold prices since the metal does not generate interest.
Suki Cooper, an analyst at Standard Chartered Plc, noted that gold’s ability to maintain upward momentum, regardless of broader economic conditions, indicates strong underlying demand. She expects further price increases in the coming weeks, with the bank projecting gold to average $2,800 an ounce in the fourth quarter and $2,900 in the first quarter of 2025.
Gold has surged by about a third this year, with its rally intensifying over the past couple of months as the Fed shifted toward rate cuts. Hedge funds have increased their net-long positions in gold, while investors have boosted their holdings in exchange-traded funds.
As of 12:37 p.m. in Singapore, spot gold remained steady at $2,750.22 an ounce. Meanwhile, the Bloomberg Dollar Spot Index edged higher. Silver prices dipped, palladium held steady, and platinum saw an increase.
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