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Highlights
- Gold stabilizes near record highs amidst rising geopolitical tensions.
- Silver approaches its highest levels since 2012, driven by similar market sentiment.
- Precious metals gain strength despite pressure from U.S. bond sell-offs.
Gold is holding close to a record high as it continues to attract demand from those seeking safe-haven assets. As geopolitical risks rise and economic uncertainty lingers, gold has become a focal point for traders. With ongoing concerns surrounding the U.S. presidential election and escalating tensions in the Middle East, gold's allure as a safe asset has intensified.
The metal's price remains just below Tuesday’s peak, bolstered by the market's focus on a tight U.S. election and fears of a broader conflict in the Middle East, particularly between Israel and Iran. These tensions have spilled over into the broader precious metals market. Silver is also seeing a sharp rise, nearing the $35 per ounce mark—a level last reached in 2012.
The demand for gold and silver is countering the effects of a recent sell-off in U.S. government bonds. Traders are betting on a slower pace of monetary easing from the Federal Reserve, which has typically put pressure on gold. Normally, when U.S. bond yields rise, non-yielding assets like gold tend to face downward pressure. However, in this instance, the safe-haven demand for gold has helped maintain its strength despite the bond market's movements.
Suki Cooper, an analyst at Standard Chartered, remarked that gold's ability to maintain high prices in the current economic landscape shows that the market continues to see positive inflows. She noted that the outlook for gold remains strong, driven by ongoing market conditions. The bank projects gold to average $2,800 per ounce in the final quarter of the year, with an increase to $2,900 anticipated in early 2025.
The broader rally in gold has surged by approximately a third this year, with much of the growth accelerating over the last few months. This follows the Federal Reserve's decision to cut interest rates, which has supported the ongoing rally. Additionally, hedge funds have increased their net-long positions in gold, and exchange-traded funds (ETFs) have seen increased holdings, further strengthening the market.
As of the latest data from Singapore, spot gold was stable at $2,747.41 per ounce, just shy of its recent record of $2,749.03. The precious metal’s recent performance suggests that traders remain cautious but see gold as a strong hedge in a period of significant global uncertainty.
This renewed interest in gold and silver could continue as market participants monitor the U.S. election and tensions in the Middle East. Gold, in particular, remains a favored asset, even in an environment where bond yields and monetary policy might otherwise create challenges.
