Investing.com — Gold prices rose to a record high on Wednesday as safe-haven demand was boosted by increased political uncertainty in the US and Japan.
The yellow metal got off to a slow start to the week as a less severe than feared attack by Israel on Iran raised hopes for an easing of tensions in the Middle East.
But demand for safe havens remained buoyed by expectations of a close presidential election in 2024, with the election scheduled to take place on November 5. Japan also added to political uncertainty after a coalition led by the ruling Liberal Democratic Party lost its parliamentary majority in recent elections.
rose 0.4% to 2,785.47, having previously hit an all-time high of $2,790.01 an ounce, while the December expiring price rose 0.6% to $2,796.85 an ounce.
Election uncertainty is increasing and gold demand is optimistic
Markets were largely tense ahead of November’s presidential election, with Donald Trump and Kamala Harris locked in a tight race.
Recent polls and prediction markets showed Trump gaining a slight lead, although analysts still considered the race too close to call.
Trump and Harris have proposed starkly different plans for the US economy, further increasing uncertainty about policy in the coming years.
Political uncertainty in Japan also added another layer to the demand for safe havens, after the LDP’s election loss left a fractured outlook for the country.
The LDP will now have to seek alliances with smaller, regional parties to retain power, potentially diluting its governance.
In addition to the elections, tensions in the Middle East continued to play a role as Iran continued to vow retaliation for Israel’s recent attack.
Israel also continued its bombing and attacks on Hamas and Hezbollah, leaving little room for a de-escalation of the conflict.
Rate uncertainty highly as eco. figures, Fed meeting looms
Markets were also tense due to a barrage of signals about the US economy and interest rates in the coming days.
Third-quarter figures are due Thursday, while the numbers — the Federal Reserve’s favorite inflation gauge — are due Friday.
The figures come just days before a Fed meeting where the central bank is widely expected to deliver a 25 basis point decline. But the prospect of lower US interest rates still bodes well for non-yielding assets like gold.
Other precious metals were also boosted by safe-haven demand. fell 3.7% to $1,020.20 per ounce, while the price fell 1.5% to $33.94 per ounce.
In industrial metals, the benchmark on the London Metal Exchange was 0.1% higher at $9,564.00 a tonne, posting steep losses in October.
