Gold Prices Edge Higher as Biden Withdraws from Presidential Race

Gold prices saw a modest increase in Asian trade on Monday, driven by safe haven demand following U.S. President Joe Biden’s decision to withdraw from the presidential race and endorse Vice President Kamala Harris as his replacement.

Market Movements

• Spot gold rose 0.2% to $2,405.02 an ounce.
• Gold futures for August delivery fell slightly by 0.3% to $2,406.50 an ounce by 00:53 ET (04:53 GMT).

Political Uncertainty Boosts Safe Haven Demand

The yellow metal remained close to last week’s record highs, where spot prices had surged to $2,475.02 an ounce amid growing bets on Federal Reserve rate cuts starting in September. Biden’s unexpected announcement added to the uncertainty, boosting demand for gold as a safe haven.

Biden endorsed Harris, who still needs official nomination at the Democratic National Convention in August. Meanwhile, Donald Trump was nominated as the Republican frontrunner last week. CBS polling showed Trump with a slight lead over both Biden and Harris.

Market Reactions

Analysts speculate that a potential Trump presidency could lead to higher long-term inflation, especially with more protectionist trade policies. The political uncertainty following Biden’s move saw donor contributions to the Democratic party surge past $50 million. The dollar weakened slightly, providing some relief to metal markets.

Other Precious Metals

• Platinum futures dipped 0.1% to $972.80 an ounce.
• Silver futures remained stable around $29.288 an ounce.

Copper Prices and China Concerns

Copper prices weakened, extending last week’s losses due to ongoing concerns about China, the world’s largest copper importer.

• Benchmark copper futures on the London Metal Exchange steadied around $9,306.50 a tonne.
• One-month copper futures fell 0.2% to $4.2283 a pound.

The People’s Bank of China unexpectedly cut its benchmark loan prime rate to stimulate economic growth. However, ANZ analysts suggested that further rate cuts might be necessary if economic conditions remain weak.

Conclusion

Gold prices are benefiting from increased safe haven demand amid U.S. political uncertainty and expectations of Federal Reserve rate cuts. Meanwhile, concerns over China’s economic outlook continue to weigh on copper prices.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.87% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Disclaimer: This text constitutes marketing communication. It is not any form of investment advice or investment research or an offer for any transactions in financial instrument. Its content does not take into consideration individual circumstances of the readers, their experience or financial situation. The past performance is not a guarantee or prediction of future results.