Investing.com — Asian trade on Friday saw gold prices hit a record high, benefiting from safe-haven demand with weeks left before a close U.S. presidential election, as well as support from interest rate cuts by the European Central Bank. .
rose 0.4% to a record high of $2,705.26 an ounce, and December expiry rose 0.5% to $2,720.15 an ounce.
The yellow metal held firm even as strong US retail sales and labor market data reinforced expectations that US interest rates will fall at a modest pace in the coming months.
Gold rises on safe-haven demand ahead of election
As the US election approaches, bullion prices have broken out of the narrow trading range seen over the past two weeks and hit new highs.
Recent opinion polls predict a close presidential election between Vice President Kamala Harris and former President Donald Trump, with less than three weeks until voting.
The divergent positions of the two candidates increased uncertainty about what the outcome of the election would be.
Although media polls show Harris with a slight lead over Trump, prediction and betting markets are largely leaning toward a Trump victory, further increasing uncertainty about the potential outcome. are.
Demand for safe-haven assets also bought gold as the Middle East conflict escalated. Traders were bracing for Israeli retaliation for the Iranian attack in early October.
Gold overcomes dollar strength
The yellow metal held firm despite pressure from stronger currencies as the dollar hit a more than 2-1/2-month high this week.
The dollar rose mainly on stronger-than-expected economic data, with another paper showing a weekly decline indicating strength in the labor market.
The findings further strengthened expectations that the Federal Reserve will reduce its rate cuts in the coming months.
However, the ECB's 25 basis point rate cut showed that the world's major central banks remain intent on further rate cuts, and that the low interest rate environment is likely to support gold and other non-yielding assets.
“Precious metals were buoyed by ECB rate cuts, which reminded markets that most central banks have entered easing mode, allowing them to ignore economic indicators that could delay the Fed's rate cutting cycle. ”ANZ analysts wrote in a note, adding that safe-haven gold demand also remained a factor.
Other precious metals were mixed in. It was steady at $1,005.95 per ounce, but rose 1% to $32.095 per ounce.
Among industrial metals, prices stabilized on Friday but were on track for a third straight week of declines as recent stimulus measures by China, the biggest copper importer, had little effect.
