By Anushree Mukherjee
(Reuters) – Gold surged to a record high on Wednesday as uncertainty surrounding the upcoming U.S. election spurred demand for safe-haven assets, while traders awaited cues on interest rate cuts.
Spot gold rose 0.2% to $$2,781.17 per ounce by 1146 GMT after hitting an all-time high of $2,789.73 earlier in the session.
U.S. gold futures rose 0.4% to $2,793.
The Nov. 5 presidential election has entered its final stretch, with recent polls indicating a fiercely competitive race between Republican former U.S. President Donald Trump and Democratic Vice President Kamala Harris.
Gold is rising due to the uncertainty related to the outcome of the election and with markets pricing another Fed rate cut next week, said Ole Hansen, head of commodity strategy at Saxo Bank, adding that dollar weakness is also supporting prices. [USD/]
“We now have $2,800 as the next major red flag to the bulls. If prices drop, it could fall to $2,715.”
Gold, seen as a hedge against geopolitical uncertainties, has surged 35% so far this year and is on track for its best annual growth since 1979. The precious metal also tends to thrive in a low-interest-rate environment.
Fed policymakers are nearly certain to reduce short-term borrowing costs by a quarter-point next week, following a drop in job openings last month.
Focus is also on the U.S. Personal Consumption Expenditures and payrolls reports due Thursday and Friday, respectively.
Global gold demand, excluding over-the-counter trading, was steady year-on-year at 1,176.5 metric tons in the third quarter as higher investment activity offset reduced jewellery consumption, the World Gold Council said.
Gold may hit $3,000 by 2025 amid emerging market fears, gold ETF investments on Fed rate cuts, and post-election market adjustments, said Dominik Sperzel, head of trading at Heraeus Metals Germany. [GOL/ETF]
Palladium fell 3.4% to $1,180.38 per ounce after hitting a 10-month high on Tuesday.
The short-covering rally triggered by news on potential Russian sanction has run its course, Saxo Bank’s Hansen said.
Spot silver shed 1% to $34.09 per ounce and platinum fell 1.5% to $1,029.88.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Shilpi Majumdar and Eileen Soreng)
