By Ashitha Shivaprasad
(Reuters) – Gold prices drifted higher on Thursday, propped up by safe-haven demand, while palladium hit a more than one-month peak after a media report sparked fears about sanctions on Russian supplies.
Spot gold rose 0.5% to $2,729.71 per ounce by 0621 GMT, slightly below the record high of $2,758.37 hit on Wednesday as U.S. election jitters and Middle East tensions boosted demand.
U.S. gold futures gained 0.5% to $2,742.70.
The U.S. dollar lingered near three-month highs, limiting gold’s potential for a further rally. A stronger dollar makes gold more expensive for other currency holders.
U.S. Vice President Kamala Harris and Republican Donald Trump are in a tight race, with less than two weeks until the Nov. 5 presidential elections.
Elsewhere, Israel launched strikes on the Syrian capital Damascus and a military site near the western city of Homs.
“For the rest of 2024, we see potential highs of $2,800, with 2025 targets around $3,000 or higher, driven by continued geopolitical risks, U.S. monetary easing cycle, and central bank purchases,” said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet.
U.S. economic activity was steady from September through early October, with a slight rise in hiring, hinting at a likely 25 basis points Federal Reserve rate cut soon. Lower rates reduce the opportunity cost of holding non-yielding bullion.
Spot silver firmed 0.8% to $34.
Lower borrowing costs, China stimulus measures, and supply constraints will continue to drive silver higher and it could potentially climb to around $45 in 2025, Sachdeva said.
Palladium jumped 4.5% to $1,105.94, its highest level since Sept. 18. The U.S. asked Group of Seven allies to consider sanctions on Russian palladium and titanium, Bloomberg News reported.
“Considering that Russia accounts for about 40% of palladium mine supply, such a decision would tighten the market and see prices rising considerably,” UBS analyst Giovanni Staunovo said.
Platinum rose 1.2% to $1,027.91.
(Reporting by Ashitha Shivaprasad and Anmol Choubey in Bengaluru; Editing by Rashmi Aich, Janane Venkatraman and Varun H K)
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