Gold prices edged up on Thursday as safe-haven demand, propelled by U.S. election uncertainty and Middle East tensions, offset the impact of a stronger U.S. dollar.
In the UAE, gold rates declined AED1.25 with 24-carat gold falling to AED330.25 and 22-carat gold reaching AED305.75. In addition, 21-carat reached AED296 and 18-carat gold hit AED253.75.
Globally, spot gold rose 0.18 percent to $2,726.34 as of 5:11 GMT after hitting a record $2,758.37 earlier in the session. Meanwhile, U.S. gold futures increased 0.36 percent to $2,739.20.
Dollar remains strong ahead of U.S. election
The U.S. dollar maintained its strength, hovering close to a three-month high, which in turn curbed upward movement in gold prices. A stronger dollar makes gold more expensive for buyers holding other currencies, thereby dampening demand for the precious metal. Despite that rise, other economic and political factors offset this downward pressure, allowing gold prices to maintain their gains.
Meanwhile, the race for the U.S. presidency has intensified. With less than two weeks remaining until the November 5 election, U.S. Vice President Kamala Harris and former President Donald Trump are focusing their efforts on key swing states, where voter turnout could prove decisive.
The outcome of this election will not only shape U.S. domestic policy but also have significant implications for global markets, as investors closely monitor how the future administration’s economic policies might impact investment choices.
Geopolitical risks
Geopolitical tensions in the Middle East, particularly involving Lebanon and Syria, have escalated, creating an atmosphere of uncertainty and instability that could potentially spill over into a broader regional conflict. These rising tensions are fueling fears of further unrest across the region, prompting investors to seek safe-haven assets like gold to protect against potential economic fallout. As a result, this increased demand for gold has provided a strong upward push to the precious metal’s prices, further reinforcing its appeal.
As geopolitical tensions persist amid the U.S. monetary easing cycle and continued central bank purchases, analysts expect gold prices to reach over $2,800 this year and $3,000 in 2025.
U.S. interest rate cuts
U.S. economic activity remained relatively steady from September through early October, with modest growth across key sectors and a slight uptick in hiring, signaling resilience despite ongoing inflationary pressures.
This sustained pace of growth, coupled with the increase in employment, has fueled speculation that the Federal Reserve may implement a 25-basis-point rate cut in the near future. A potential rate cut reflects the central bank’s efforts to support continued economic expansion while managing inflation, which remains a key concern for policymakers. Lower interest rates tend to reduce the opportunity cost of holding bullion.
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Other precious metals
Elsewhere, lower borrowing costs, stimulus measures in China, and supply constraints will continue to drive silver higher into 2025 where the metal could potentially climb to levels around $45, analysts added.
As gold prices hold onto their gains, spot silver gained 0.47 percent to $33.88 per ounce while platinum rose 1.16 percent to $1,027.60. Palladium recorded a notable 5.24 percent surge to $1,113.47.
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