Metal extends its blazing rally as US election, simmering Middle East tension and rate cuts provide support
21 October 2024 - 07:44
byRahul Paswan and Ashitha Shivaprasad
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Bengaluru — Gold rose to a fresh high on Monday, extending its blazing rally amid the uncertainty surrounding the US election, simmering Middle East tension and rate cuts by major central banks, while silver scaled a near 12-year peak.
Spot gold was up 0.4% at $2,731.79/oz by 3.31am GMT, after hitting an record high of $2,732.73 earlier. US gold futures were 0.6% higher at $2,746.80.
Helped by bullion’s rally, spot silver rose 1.3% to $34.08/oz, its highest since late 2012.
“The current market environment consists of interest rates moving south combined with heightened geopolitical risks — a scenario which suits gold on both fronts,” said Tim Waterer, chief market analyst at KCM Trade.
Investors also digested news that China cut its benchmark lending rates following reductions to other policy rates in September as part of a package of stimulus measures to revive the economy.
Gold demand in top consumer China has taken a hit amid high prices and an economic slowdown.
Elsewhere, traders are pricing in a 99% chance of a US Federal Reserve interest rate cut in November. The European Central Bank (ECB) cut interest rates by a quarter point last week.
Lower rates generally enhance gold's allure, as bullion yields no interest. Gold is also considered a safe investment during times of economic and political turmoil.
The 2024 US presidential race between former president Donald Trump and vice-president Kamala Harris is neck and neck in the seven battleground states that will decide the November 5 election.
In the Middle East, hundreds of Beirut residents fled their homes late Sunday, with multiple explosions heard, as Israel prepared to attack sites linked to the financial operations of Hezbollah group.
For gold, "$2,800 looks to be a viable year-end target.... There will be temptation to lock in some profits, which could slow the immediate upside,” Waterer said.
He, however, said he expected buyers would be waiting on the sidelines for better entry points should any pullback occur.
Platinum rose 0.7% to $1,020.95/oz, its highest since mid-July. Palladium gained 0.8% to $1,087.87.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Global uncertainty pushes gold to new high
Metal extends its blazing rally as US election, simmering Middle East tension and rate cuts provide support
Bengaluru — Gold rose to a fresh high on Monday, extending its blazing rally amid the uncertainty surrounding the US election, simmering Middle East tension and rate cuts by major central banks, while silver scaled a near 12-year peak.
Spot gold was up 0.4% at $2,731.79/oz by 3.31am GMT, after hitting an record high of $2,732.73 earlier. US gold futures were 0.6% higher at $2,746.80.
Helped by bullion’s rally, spot silver rose 1.3% to $34.08/oz, its highest since late 2012.
“The current market environment consists of interest rates moving south combined with heightened geopolitical risks — a scenario which suits gold on both fronts,” said Tim Waterer, chief market analyst at KCM Trade.
Investors also digested news that China cut its benchmark lending rates following reductions to other policy rates in September as part of a package of stimulus measures to revive the economy.
Gold demand in top consumer China has taken a hit amid high prices and an economic slowdown.
Elsewhere, traders are pricing in a 99% chance of a US Federal Reserve interest rate cut in November. The European Central Bank (ECB) cut interest rates by a quarter point last week.
Lower rates generally enhance gold's allure, as bullion yields no interest. Gold is also considered a safe investment during times of economic and political turmoil.
The 2024 US presidential race between former president Donald Trump and vice-president Kamala Harris is neck and neck in the seven battleground states that will decide the November 5 election.
In the Middle East, hundreds of Beirut residents fled their homes late Sunday, with multiple explosions heard, as Israel prepared to attack sites linked to the financial operations of Hezbollah group.
For gold, "$2,800 looks to be a viable year-end target.... There will be temptation to lock in some profits, which could slow the immediate upside,” Waterer said.
He, however, said he expected buyers would be waiting on the sidelines for better entry points should any pullback occur.
Platinum rose 0.7% to $1,020.95/oz, its highest since mid-July. Palladium gained 0.8% to $1,087.87.
Reuters
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