Gold prices broke the $2,700 level for the first time ever on Friday, setting a new all-time high as U.S. election concerns loomed and Middle East tensions persisted, boosting safe-haven demand for the precious metal. The monetary policy’s trajectory also supported the surge in prices ahead of the Federal Reserve‘s potential rate cut in November.
In the UAE, gold rates gained AED2.5 with 24-carat gold rising to AED328.25 and 22-carat gold reaching AED304. In addition, 21-carat gold was priced at AED294.25 and 18-carat gold at AED252.25.
Globally, spot gold rose 0.73 percent to $2,713.41 as of 5:52 GMT after hitting a record $2,713.76 earlier in the session. Meanwhile, U.S. gold futures increased 0.70 percent to $2,726.55.
Safe-haven demand propels gold to all-time high
As tensions in the Middle East escalated, less than three weeks remained to vote for the next U.S. president. Democratic Vice President Kamala Harris and Republican former President Donald Trump are rallying for the support of every last voter.
Analysts said that gold prices may rise even further amid economic and political uncertainties.
Economic landscape
On Thursday, investors awaited a slew of U.S. economic data, which signaled a strengthening economy, further supporting the U.S. dollar. Stronger-than-expected retail sales data and a decline in weekly jobless claims pointed to a stronger labor market and improving economic conditions which supported the U.S. dollar.
The readings raised market expectations that the Fed will cut interest rates by a smaller margin in the coming months. Traders priced in a 90.2 percent chance of a Fed rate cut in November, according to the CME FedWatch tool.
Elsewhere, the European Central Bank cut interest rates for the third time this year as the eurozone economy struggles. Analysts noted that gold prices will likely keep benefitting from the global economic landscape as interest rates decline.
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Other precious metals
As gold prices set a new record high, the precious metals market saw positive movement with spot silver rising 0.90 percent to $31.98 per ounce and platinum gaining 0.79 percent to $1,000. Palladium also rose 0.73 percent to $1,049.75.
