Janice R. Andrews
October 18, For the first time in history, gold has surged above $2,700, driven by increased demand for safe haven assets as a result of growing global unrest and market turbulence around the US presidential elections. After hitting an all-time high of $2,714.00 earlier in the session, the precious metal increased 0.6% to $2,709.81 per ounce by 1145 GMT. Futures for US gold increased 0.7% to $2,725.
Concerns about the escalating hostilities in the Middle East have been a major factor in gold’s over 2% weekly increase. Benjamin Netanyahu, the prime minister of Israel, pledged to keep up military operations in Gaza and Lebanon, and the militant Lebanese organization Hezbollah declared an intensification of its conflict with Israel. These changes have increased risk aversion, which has caused investors to look to gold as a reliable asset during volatile periods.
StoneX analyst Rhona O’Connell stated, “The Middle East situation continues to fan the flames of uncertainty,” elucidating how the geopolitical environment is a major driver of market behavior.
Independent researcher Ross Norman emphasized how the strong increase in gold was fueled by speculative interest, especially from Asia. Without any consolidation or profit-taking, he observed that gold is witnessing “high conviction trades,” ignoring variables like declining inflation and rising Treasury yields.
The U.S. Federal Reserve and other major central banks are expected to continue loosening their monetary policies, which has contributed significantly to the over 31% increase in gold prices this year.
On the other hand, high prices have hurt physical marketplaces. Ahead of a major festival, dealers in India, one of the world’s biggest gold marketplaces, were compelled to give discounts as demand was tempered.
According to Frank Watson, a market analyst at Kinesis Money, “if gold continues its upward momentum, it could face resistance at $2,750 per ounce, the upper limit of a trend channel formed since late July.”
This surge highlights the robust allure of gold in the face of worldwide unrest, as investors are turning more and more to the safe-haven commodity.
