Gold Trades Near Record High as US Election Drives Haven Demand
(Bloomberg) -- Gold edged down slightly, after hitting a fresh record high as the run-up to the US election underpins haven demand.
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Bullion earlier reached $2,790.10 an ounce, narrowly eclipsing the previous day’s peak, before heading lower. The tight US presidential race between Kamala Harris and Donald Trump is creating uncertainty that’s underscoring bullion’s role as a place of safety for investors.
Traders are also keeping a close eye for clues on the path of US interest rates. While higher-than-expected US jobs data and robust GDP figures saw traders trim bets on the size of Federal Reserve rate cuts, it remains on track to implement more monetary easing at its meeting next week. Lower borrowing costs tend to benefit the precious metal, as it doesn’t pay interest.
Gold has surged by more than a third this year, also supported by central-bank buying and haven demand amid conflicts in the Middle East and Ukraine. The advance has taken the metal’s 14-day relative-strength index above 70, a level that can suggest the market has become overbought.
The Nov. 5 US election is seen as a major risk event for the precious metal, which could open gold up to a correction of more than $100 an ounce, according to Ole Hansen, head of commodity strategy at Saxo Bank A/S.
Spot gold was 0.4% lower at $2,776.09 an ounce as of 10:07 a.m. in London. The Bloomberg Dollar Spot Index weakened slightly. Silver, palladium and platinum all fell.
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