At the beginning of the European market on Wednesday (October 23), spot gold prices broke through the 2750 mark for the first time in history, with a highest price of $2758.51 per ounce. Since the beginning of the year, gold prices have risen by over 33%.
Spot gold daily chart
At the same time, gold futures also performed strongly, with the main continuous price reaching a record high of $2772.6 per ounce; Earlier in the day, spot silver rose to $34.87 per ounce, setting a new high since 2012, before slightly falling to around $34.72 at the time of publication.
Analysis suggests that the tense situation of the Middle East conflict and the latest changes in the US presidential election have enhanced the attractiveness of gold as a safe haven asset; In addition, with multiple central banks entering a cycle of interest rate cuts, precious metal prices usually benefit from the decrease in interest rates.
Regarding the Middle East conflict, Israeli officials have repeatedly responded by stating that they will make Iran pay the price and may retaliate in various ways, including striking Iran's nuclear facilities. Yesterday, Iranian President Pezehezhian stated that every Israeli attack will receive an appropriate response.
With less than two weeks left until November 5th, the voting day for the US presidential election, the latest polls show that Trump and Harris have evenly matched support rates. But on the encrypted prediction platform Polymarket, Trump's win rate has reached 64%.
In fact, gold was affected by the 'Trump trade' last week. At the time, Kelvin Wong, Senior Market Analyst for OANDA Asia Pacific, said, "Trump's inauguration should be able to support gold as he may exacerbate trade tensions and widen budget deficits
Goldman Sachs analyst Michael Cahill said that with the Republican Party winning both the White House and Congress, the United States may push for higher tariffs and stronger domestic tax cuts, thereby stimulating the economy. And both of these measures could push up US inflation, which could benefit gold.
Paul Tudor Jones, a legendary American investor and billionaire hedge fund manager, said that he was holding gold, bitcoin and bulk commodities to hedge against inflation risks because neither of the two presidential candidates had an appropriate plan to solve the US debt problem.
On the week of the voting day, the Federal Reserve will also hold a monetary policy meeting, and the expectation of further interest rate cuts has also helped drive gold prices this year. According to the tools of the Federal Reserve of Zhishang Institute, the market expects the probability of the bank announcing a 25 basis point interest rate cut to reach 89%.
At the same time, many global central banks have entered a loose cycle, with the European Central Bank, Bank of Canada, Bank of England, and others recently cutting interest rates.
Christine Lagarde, the President of the European Central Bank, stated yesterday that the bank has a clear direction on borrowing costs, but the speed of the reduction is still to be determined, and she does not rule out taking larger measures.
At the same time, central banks around the world continue to purchase gold in order to diversify their reserves, resulting in strong physical buying of gold. According to data from the World Gold Council, central bank buying reached a historic high of 483 tons in the first half of this year.
UBS precious metals strategist Joni Teves said that the outlook for gold is quite optimistic, and he expects the price of gold to reach $3000 per ounce next year. "We believe that there is a lot of room for growth in investors' holdings of gold in the next year or so, which should push up the price of gold," he said
