NEW YORK: Gold prices charged to an all-time high on Thursday, as expectations of more interest rate cuts by the US Federal Reserve and uncertainty over the US presidential election boosted demand for bullion.
Spot gold rose 0.5% to $2,686.46 per ounce by 1126 GMT, after hitting a record high of $2,688.82 earlier in the day. US gold futures gained 0.4% to $2,702.20.
“With the US election less than three weeks away, market caution is likely to remain a key theme. Given the tight race between Donald Trump and Kamala Harris, this adds another layer of uncertainty – stimulating demand for safe haven assets,” said FXTM senior research analyst Lukman Otunuga.
Gold has risen over 30% so far this year in a record-breaking rally driven by expectations that the Fed will cut rates further after a jumbo reduction in September, along with ongoing geopolitical uncertainties.
The European Central Bank is also expected to make its first back-to-back rate cut in 13 years later in the day. Lower interest rates and geopolitical tensions tend to support bullion, which yields no interest and is considered a safe asset.
“The LBMA poll that came out from Miami earlier in the week, where the base look for gold prices was to rally near $3,000 in the next year and silver doing even better, I think that potential is also just attracting a bit of attention,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Gold prices are expected to rise to $2,941 a troy ounce over the next 12 months, delegates to the London Bullion Market Association’s annual gathering predicted earlier this week. Meanwhile, traders are on the lookout for US retail sales and weekly jobless claims data due later in the day.
Source: Brecorder
