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Gold prices gained in Asian trade on Tuesday, stabilizing just below their recent record highs as traders sought safe havens due to growing uncertainty surrounding the upcoming U.S. presidential election. The anticipation of a tight race between Donald Trump and Kamala Harris has pushed investors towards safer assets like gold, bolstering its appeal despite a stronger U.S. dollar.
Spot gold rose 0.5% to $2,734.38 an ounce, while gold futures increased 0.4% to $2,748.40 an ounce, just shy of the record spot price of over $2,740 set on Monday.
Gold Near Record Highs Due to Election Uncertainty
Polls indicate a close competition in the U.S. presidential election, which is set for two weeks from now. The uncertainty surrounding the outcome and the contrasting policies of both candidates have driven traders towards risk-averse strategies. Safe-haven demand has increased, with gold standing out as a preferred choice as election day approaches.
Adding to the risk-averse sentiment, geopolitical concerns, particularly the escalating conflict in the Middle East, have further boosted demand for safe assets. Fears were heightened after an attempted drone attack on Israeli Prime Minister Benjamin Netanyahu, along with reports of Israel planning strikes against Hamas, Hezbollah, and potentially Iran.
Safe-Haven Demand Bolsters Gold Against Dollar Strength
Despite a stronger dollar, which reached near three-month highs this week, gold and other precious metals remained resilient. The dollar’s rise was fueled by expectations that the Federal Reserve will reduce interest rates at a slower pace, which generally weighs on metals markets. However, the safe-haven demand has helped offset these negative factors for gold.
Other Precious Metals Also See Gains
Platinum futures climbed 0.4% to $1,019.60 an ounce, and silver futures rose 0.7%, remaining near a 12-year high set on Monday. The overall positive sentiment towards precious metals has been sustained by the same geopolitical and economic uncertainties affecting gold.
Copper Rebounds Amid Hopes for Chinese Stimulus
In the industrial metals market, copper prices recovered some recent losses, benefiting from hopes that China, the world’s largest copper importer, will introduce more robust stimulus measures to spur economic growth.
London Metal Exchange copper futures rose 0.7% to $9,638.50 per ton, while December copper futures increased 0.8% to $4.3943 per pound. Copper had faced steep declines in recent weeks, with investors disappointed by the limited impact of China’s previous economic stimulus measures. However, optimism remains that the National People’s Congress, set to meet later in October, will approve additional fiscal spending to support growth.
Gold’s sustained strength reflects ongoing global uncertainty, and the next few weeks will be critical in determining its direction as both geopolitical tensions and election outcomes come into sharper focus.
