On Friday, gold prices surged past the US$2,700 threshold for the first time, continuing a rally fueled by expectations of additional monetary policy easing and safe-haven demand amid uncertainties surrounding the U.S. presidential elections and conflicts in the Middle East.
By 0933 GMT, spot gold had increased by 0.7% to reach US$2,711.75 per ounce, earlier hitting an all-time high of US$2,714.00 during the session. So far this week, bullion has gained over 2%. Meanwhile, U.S. gold futures also rose by 0.7%, reaching US$2,726.90.
“The markets are still influenced by geopolitical factors, and the recent developments in the Middle East have heightened uncertainty,” stated StoneX analyst Rhona O’Connell.
The Hezbollah militant group in Lebanon announced on Friday that it was escalating its conflict with Israel, while Israeli Prime Minister Benjamin Netanyahu pledged to continue military operations in both Lebanon and Gaza.
As geopolitical tensions rise, investors are increasingly turning to safe-haven assets like gold due to risk aversion and concerns about instability in global markets.
“It’s not surprising that gold has reached new highs, surpassing the significant US$2,700 mark during Asian trading hours, as speculative interest appears to be strong in that region,” noted independent analyst Ross Norman.
“Gold is currently benefiting from highly confident trading, largely ignoring factors such as declining inflation and Treasury yields, and is not showing signs of consolidation or profit-taking,” he added.
This year, gold prices have risen over 31%, driven by expectations of further easing from major central banks, including the U.S. Federal Reserve, alongside ongoing geopolitical tensions.
In the physical market, dealers in India faced challenges as they had to offer discounts this week due to decreased demand linked to record high prices ahead of an important festival.
“From a technical standpoint, if gold continues to climb, it may face resistance around US$2,750 per ounce, which marks the upper boundary of a rising trend channel established since late July,” said Frank Watson, a market analyst at Kinesis Money.
Additionally, spot silver increased by 1.2% to $32.07, aiming for a weekly gain, while platinum rose by 1.6% to $1,007.54, and palladium saw a 2.1% increase to $1,063.50.
Source: Reuters
