Safe-Haven Demand Keeps Gold Near Record Highs Amid Geopolitical Uncertainty
Gold prices rose on Tuesday, remaining close to the all-time highs achieved in the previous session, as increasing geopolitical tensions, uncertainties surrounding the U.S. elections, and expectations of central banks cutting interest rates drove demand for the precious metal.
As of 0936 GMT, spot gold was up 0.5%, trading at $2,733.15 per ounce, while U.S. gold futures increased by 0.3% to $2,747.60. Gold reached a record peak of $2,740.37 on Monday and has surged over 32% this year, highlighting its status as a safe-haven asset during turbulent times.
“Uncertainty is the prevailing theme right now, making gold a critical refuge asset for traders,” commented Ricardo Evangelista, a senior analyst at ActivTrades. He also suggested that gold prices could potentially reach $2,800 in the near future, fueled by rate cuts, central bank purchases, and geopolitical instability, particularly in light of the upcoming U.S. presidential election.
Despite a stronger U.S. dollar and rising Treasury yields, the momentum behind gold has been strong enough to counteract the impacts of weakened physical demand and increased supply. Han Tan, chief market analyst at Exinity Group, noted that gold could continue to achieve unprecedented prices as long as market participants remain unfazed by the rising Treasury yields and dollar strength. He also emphasized the importance of sustained net inflows into gold-backed exchange-traded funds (ETFs) in maintaining gold’s upward trajectory.
According to the World Gold Council (WGC), global physically-backed gold ETFs recorded their fifth consecutive month of inflows in September, drawing in $1.4 billion.
From a technical perspective, the Relative Strength Index (RSI) for gold is currently at 74, indicating that it may be entering “overbought” territory, as an RSI above 70 suggests.
In addition to gold, silver prices rose by 1.3% to $34.19 per ounce, following a spike to its highest level since late 2012 in the previous session. Tan predicted that silver could surpass $35 before the U.S. elections on November 5, provided the favorable conditions for precious metals persist.
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