(Bloomberg) — Gold prices extended their gains to a new record high as traders focused on the U.S. presidential election amid tensions in the Middle East.
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Gold bullion topped the $2,700 per ounce mark on Friday, trading as much as 0.6%, with analysts saying demand increased amid uncertainty over the outcome of the US election and concerns over the Middle East. rose. Israel is talking about attacking Iran after a Hezbollah drone exploded near Prime Minister Benjamin Netanyahu’s private residence over the weekend.
Silver, a fellow precious metal, also rose, rising as much as 1.2% on Monday to its highest level since 2012.
Gold has been hitting new highs in recent months and is up more than 30% this year. In addition to flight demand and U.S. political uncertainty, strong central bank buying and expectations for U.S. interest rate cuts accelerated the rise. Lower interest rates are often seen as bullish for interest-free gold.
“The simple conclusion is that gold thrives in uncertainty,” said Lorna O’Connell, head of EMEA and Asia market analysis at StoneX. “The uncertainty about the medium-term direction of U.S. foreign policy is heightening tensions.”
Meanwhile, asset managers have increased net long positions in gold, and investors have added to their holdings in exchange-traded funds in recent trades. Commonwealth Bank of Australia analyst Vivek Dhar said in a note that gold futures prices could rise to an average of $3,000 in the fourth quarter of 2025.
SEE ALSO: Heaven Metals hits new record, European gold miners rise
Ole Hansen, head of commodities strategy at Saxo Bank A/S, said gold prices were supported by “increasing concerns about the growing US debt mountain” and price momentum also supported technical buying by short-term traders. He said that
Spot gold rose 0.5% to $2,734.33 an ounce as of 1 p.m. in London. The Bloomberg Dollar Spot Index and the 10-year U.S. Treasury yield also rose. Palladium fell, but platinum and silver rose.
“We think the combination of safe-haven demand and macro conditions amid escalating tensions in the Middle East and the ongoing war in Ukraine will push gold prices to new highs,” said Ewa Mantay, commodity strategist at ING Bank NV. said. He said gold is likely to perform well regardless of the outcome of the US election.
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