Gold Hits Record High as Rate Cuts
Oct 23, 2024
Gold prices surged to a record high on Monday, while silver hit its highest level in nearly 12 years, as growing concerns around the U.S. presidential election and escalating tensions in the Middle East boosted demand for safe-haven assets.
As of 9:50 a.m. ET (1350 GMT), spot gold rose 0.7% to $2,739.50 per ounce, after reaching an all-time high of $2,740.37 earlier in the session. U.S. gold futures were up 0.7% at $2,750.00.
Gold, traditionally seen as a reliable hedge in times of political and economic uncertainty, has climbed over 32% this year, repeatedly breaking records. This rally has been driven by a combination of factors, including interest rate cuts from the Federal Reserve and increasing demand for safe investments.
"We're just weeks away from the U.S. elections, and there's a lot of geopolitical tension in the Middle East—Israel, Iran, and other events behind the scenes—that's contributing to gold's rise," said Daniel Pavilonis, senior market strategist at RJO Futures.
In the U.S., former President Donald Trump and Vice President Kamala Harris are neck-and-neck in several battleground states, adding further uncertainty to the race.
Meanwhile, in Lebanon, many Beirut residents have fled their homes as Israel ramps up preparations to target Hezbollah's financial operations, fueling concerns about a broader conflict in the region.
UBS analyst Giovanni Staunovo believes gold could continue to rise, potentially reaching $2,900 per ounce over the next year, especially if the Federal Reserve introduces more rate cuts.
Traders now see a 90% chance of a quarter-point rate cut by the Fed in November, according to the FEDWATCH tool.
Silver Gains Momentum, Platinum and Palladium Mixed
Silver also saw strong gains, with spot prices rising 1.2% to $34.06 per ounce, the highest level since late 2012. Pavilonis noted that silver's recent breakout may draw in more investors from the sidelines, as it looks poised to close the gap with gold.
Elsewhere in the precious metals market, platinum inched up 0.1% to $1,014.20 per ounce, marking its highest point since mid-July, while palladium slipped 1.1% to $1,067.49.
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