Gold prices neared a record high on Tuesday (10/29), supported by uncertainties surrounding the upcoming U.S. presidential election. Investors are also awaiting economic data for insights into the Federal Reserve’s interest rate policy.
According to Reuters, spot gold prices rose by 0.4% to $2,753.00 per troy ounce at 05:21 GMT, approaching the record high of $2,758.37 set last Wednesday. U.S. gold futures climbed 0.3% to $2,765.20.
"With the U.S. election approaching, gold could continue to gain momentum as a hedge against market turbulence, further supported by a temporary pause in the strengthening of the U.S. dollar and overnight Treasury yields," said Yeap Jun Rong, a market analyst at IG.
"Stronger economic data could support the Fed's cautious approach to loosening policy. However, we expect gold prices to remain elevated, with a small anticipated rate cut of 25 basis points in November."
With only eight days until the Fed's interest rate decision, investors are looking to key data releases to gauge their impact on the U.S. central bank’s stance. This week’s data includes U.S. job openings at 14:00 GMT, ADP employment data on Wednesday, the Personal Consumption Expenditures (PCE) Index on Thursday, and the jobs report on Friday.
The U.S. presidential election is set for November 5, potentially impacting the country’s economic policy direction.
According to the CME FedWatch Tool, markets estimate a roughly 97% chance of a 25 basis-point rate cut by the Fed. Lower rates reduce the opportunity cost of holding gold, which is also viewed as a safe haven asset during times of economic and political uncertainty.
Elsewhere, at least 60 people were killed and dozens injured in an Israeli attack in Lebanon’s eastern Bekaa Valley, according to two security sources and the Mayor of Baalbek, as reported by Reuters.
Spot silver prices rose 0.5% to $33.86 per troy ounce, while platinum climbed nearly 1% to $1,043.20. Palladium prices gained 0.8% to $1,227.84 after reaching a 10-month high earlier in the session.