Gold gains to another new record high

by Sybilla Gross

Gold rose to a record on Wednesday on haven demand ahead of the US election, and as traders waited for economic data that may give clues on the Federal Reserve’s rate path. 

Bullion climbed as high as $2,789.86 an ounce, topping the previous record posted on Tuesday. A Bloomberg gauge of the dollar snapped a three-day advance ahead of US GDP figures due later Wednesday. A weak reading may support the case for deeper rate cuts, with Fed policymakers to meet on Nov. 6-7. Lower borrowing costs are typically beneficial for the precious metal that doesn’t offer any interest.

The precious metal has surged by more than a third this year, aided by central-bank buying and haven demand due to conflicts in the Middle East and Ukraine. The tight US presidential race between Kamala Harris and Donald Trump that’s less than a week away is also front of mind for investors, with uncertainty over the outcome buoying haven demand.

“Market positioning is elevated ahead of the election but also in anticipation of further Fed rate cuts and broader market and geopolitical uncertainty,” Standard Chartered Plc analyst Suki Cooper said in a note. “Under a Trump-win scenario, markets are focused on the implications of wider tariffs, as well as inflationary pressures as a result of such tariffs.”

Global gold demand swelled about 5% in the third quarter, setting a record for the period and lifting consumption above $100 billion for the first time, according to the World Gold Council. The increase — which saw volumes climb to 1,313 tons — was underpinned by stronger investment flows from the West, including more high-net-worth individuals. 

Spot gold rose 0.5% to $2,787.67 an ounce as of 7:05 a.m. in London. The Bloomberg Dollar Spot Index was down 0.1%. Silver palladium and platinum all declined.

Traders will be scrutinizing US inflation and payroll figures at the end of the week for further clues on the Fed’s easing trajectory into 2025. The reports are forecast to show underlying resilience in the economy and a hiccup in the labor market after two hurricanes. Economists expect policymakers to cut rates by a quarter percentage point next week.