Gold prices rose on Thursday to just below their all-time high as uncertainty surrounding the U.S. elections and interest rate cuts by major central banks rose while investors awaited the release of several sets of U.S. economic data for further insight into the Federal Reserve‘s policy direction.
In the UAE, gold rates gained AED0.5 with 24-carat gold rising to AED324.25 and 22-carat gold reaching AED300.25. In addition, 21-carat gold was priced at AED290.75 and 18-carat gold at AED249.25.
Globally, spot gold rose 0.18 percent to $2,678.97 as of 5:11 GMT while U.S. gold futures increased 0.16 percent to $2,695.70. Spot gold recorded an all-time high of $2,685.42 scaled on September 26.
U.S. elections raise safe-haven demand
Gold prices inched closer to their record high as investors sought safe-haven assets including gold as a hedge amid uncertainty over the U.S. elections. Analysts expect prices to test the $2,700 level in the short term.
Republican presidential candidate Donald Trump defended his protectionist trade policies and other fiscal proposals on Tuesday, which if implemented under his presidency, may support gold prices as they might raise trade tensions and widen the budget deficit.
U.S. economic data
The U.S. retail sales and industrial production data for September, as well as weekly jobless claims data, are all due later today. If the retail sales data misses expectations, it could further support gold prices.
Traders are currently pricing a 91.9 percent chance of a 25-basis-point rate cut by the U.S. central bank next month, according to the CME FedWatch tool.
ECB to cut rates
Elsewhere, the European Central Bank will most likely cut interest rates again as inflation in the eurozone is now increasingly under control. The U.K’s inflation rate slowed sharply last month, which also reinforced bets on a Bank of England rate cut next month.
As the world moves to a lower interest rate environment and geopolitical tensions in the Middle East persist, gold prices remain supported.
Read: UAE, global gold prices up as investors await U.S. retail sales data
Other precious metals
As gold prices neared their record levels, the precious metals market saw mixed movement with spot silver declining 0.23 percent to $31.60 per ounce and platinum rising 0.82 percent to $1,001.32. Meanwhile, palladium slipped 0.05 percent to $1,022.86.
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