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Gold prices edged higher in Asian trading on Wednesday, nearing record levels as uncertainty surrounding the 2024 U.S. presidential elections intensified after a heated debate between candidates Kamala Harris and Donald Trump. Investors also shifted focus to a crucial U.S. inflation report, pushing demand for safe-haven assets like gold and the Japanese yen, while the dollar weakened post-debate.
A drop in U.S. stock index futures further highlighted the decline in risk appetite. Spot gold rose 0.1% to $2,519.73 an ounce, while December gold futures climbed 0.2% to $2,548.45 an ounce as of 00:19 ET (04:19 GMT).
Dollar Retreats, Gold Rises After Harris-Trump Debate
Gold’s gains were supported by a decline in the dollar, which followed the tense debate between Harris and Trump on Tuesday night. Both candidates exchanged sharp criticisms of each other’s policies, heightening expectations for a highly contested election.
The uncertainty surrounding the economic outlook for 2024, given the contrasting plans of Harris and Trump, drove safe-haven demand for gold. Spot gold traded just below its all-time high of $2,532.05 an ounce.
Inflation Data in Focus for Rate Decisions
Investors also exercised caution ahead of the U.S. Consumer Price Index (CPI) report due later on Wednesday. The data is expected to show continued cooling inflation, which could give the Federal Reserve more confidence to start cutting interest rates.
This inflation report comes just one week before the Fed’s policy meeting, where a 25 basis point rate cut is widely expected. However, resilient U.S. economic data has caused some traders to pull back on expectations for a more aggressive 50 basis point rate cut, leading to volatility in global markets and keeping gold just below its record highs.
Other precious metals also saw gains, with platinum futures up 0.1% to $945.50 an ounce and silver futures rising 0.6% to $28.777 an ounce. Both metals have underperformed gold in recent months.
