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Gold prices touched a record high of $2,778.79 per ounce on Wednesday, driven by traders’ anxieties over the US election and expectations of dovish Federal Reserve policy moves. Spot gold traded up 0.1% to $2,778.27 per ounce in early hours, continuing its bullish trajectory.
US gold futures also saw gains, rising 0.4% to $2,790.60.
See also: Gold prices steadily climbed, reaching a high of 2782.16, with the MACD showing bullish momentum as moving averages trend upward on the VT Markets app.
As US voters prepare to head to the polls, a narrow election race has driven many towards safe-haven assets, propping up bullion.
In recent days, the US Job Openings and Labor Turnover Survey (JOLTS) from September showed job openings falling to the lowest level in over three and a half years, reflecting a labour market slowdown.
Revised data also pointed to a decline in August job openings, deepening concerns of a weakened economic outlook.
See also: Brace for Trump-Harris Showdown
Interestingly, October’s consumer confidence report offered a positive surprise, with the index hitting 108.7—its highest level in nine months, up from 99.2 in September.
Despite this boost, the consensus among Federal Reserve policymakers leans heavily towards a quarter-point cut in borrowing costs next week.
The Fed’s rate decision, scheduled for November 7, will hinge on additional data, including ADP employment, Personal Consumption Expenditures (PCE), and payrolls later this week.
This rate-cut expectation is particularly beneficial for gold, which thrives in low-rate environments where it can better compete with yield-bearing assets. Furthermore, gold remains a popular hedge against the political and economic uncertainties looming in the lead-up to the election.
The spike in demand highlights traders’ preference for safe assets amidst the broader geopolitical context, including elevated tensions in the Middle East, as Gaza reports a mounting death toll.
On the physical side, Indian gold buyers have stayed resilient despite the record-high prices, maintaining purchases for Dhanteras and Diwali festivities. Many buyers are banking on the precious metal’s continued rally to offset recent stock market volatility.
Other metals saw mixed movements: spot silver edged up 0.2% to $34.51, palladium rose 0.5% to $1,050.42, while platinum saw a slight pullback, declining 0.9% to $1,211.37.
As US election uncertainty and potential interest rate cuts continue to drive gold demand, the outlook remains bullish with cautious optimism for further gains if these factors persist.
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