(Bloomberg) — Gold topped $2,700 an ounce for the first time, as concerns over escalating conflicts in the Middle East and a tight US election race prompt investors to flock to safety.
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Bullion climbed as much as 0.7% to $2,711.99 an ounce, beating the all-time high set in the previous session. Markets are focused on increasingly fraught geopolitical developments after Israel said it killed Hamas leader Yahya Sinwar, the architect of the Palestinian group’s attack on southern Israel that has triggered a year-long war in Gaza.
Prime Minister Benjamin Netanyahu said Israel would keep fighting until all the hostages seized by Hamas last year are free, even as US President Joe Biden said it was time for the war to end. Investors typically seek safety in gold in times of geopolitical and economic uncertainty.
Investors were also repositioning portfolios ahead of the US election on Nov. 5.
“Traditional polls and decentralized betting polls have diverged significantly, even as we get closer to elections,” said Christopher Wong, FX strategist at Oversea-Chinese Banking Corp. “Trump hedges — long gold — may still gather traction given the fluidity of election developments and geopolitical uncertainties.”
Meanwhile, the Bloomberg Dollar Spot Index fell 0.1%, snapping a four-day rally. A weaker greenback makes bullion cheaper for many buyers, as it is priced in the US currency.
“The dollar rally is also starting to look a bit stretched technically, so a near-term pullback should not be ruled out,” Wong said.
Gold is about 2% higher for the week, with haven demand outweighing other macro headwinds that would normally weigh on the precious metal after US reports on Thursday diminished bets on the scale of Federal Reserve easing.
Retail sales strengthened in September by more than forecast and jobless claims unexpectedly fell in a separate print, reinforcing the view the economy is nowhere near a recession. Higher interest-rate environments typically pressure non-yielding gold.
Bullion is one of 2024’s strongest performing commodities, with gains of more than 30% so far this year. Rate-cut optimism fueled the most recent gains as the Fed kicked off its easing cycle last month. Robust central bank buying has also been a long-standing pillar of support for gold prices.
Western investors have also helped drive prices higher, after largely remaining on the sidelines in the first half of the year as Asian demand surged. The US central bank’s pivot to looser monetary policy has bolstered the appeal of exchange-traded funds backed by bullion, with holdings on course for a fifth monthly expansion in October — the longest run of inflows since 2020.
For many in the industry, the outlook from here is even more bullish. Traders, refiners and miners who attended the London Bullion Market Association’s annual gathering this week saw prices rising to about $2,917 an ounce by late October 2025, according to the average forecast from a survey of delegates.
Spot gold was trading at $2,708.71 an ounce as of 11 a.m. in Singapore. Silver, palladium and platinum all climbed.
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