By Ashitha Shivaprasad
(Reuters) – Gold breached the $2,700-per-ounce level on Friday for the first time ever as U.S. election jitters and simmering Middle East tensions boosted safe-haven demand, while a looser monetary policy environment also added fuel to the rally.
Spot gold was up 0.4% at $2,703.61 per ounce by 0748 GMT after scaling a record high of $2,714 earlier in the session. Prices gained about 2% this week.
U.S. gold futures rose 0.4% to $2,719.20.
Gold could gather further traction given the fluidity of election developments and geopolitical uncertainties, said OCBC FX strategist Christopher Wong.
Hezbollah said it will escalate war with Israel after the killing of Hamas leader Yahya Sinwar.
Elsewhere, the battle for the U.S. presidency is heating up, with less than three weeks remaining for the election.
“Gold has scoffed at a surging dollar and rallies at every chance it gets. It’s just a bull market that shows no signs of exhaustion,” said Tai Wong, an independent metals trader. [USD/]
U.S. retail sales data on Thursday pointed to a strengthening economy, boosting the U.S. dollar. But traders still see a 90% chance of a rate cut in November. The European Central Bank cut interest rates for the third time this year as the euro zone economy sags.
Lower rates increase the non-yielding bullion’s appeal.
Bullion will continue to perform well over the long term, benefiting from the precarious fiscal situations of many Western nations, and the global desire for a store of value independent of other assets and institutions, said Ryan McIntyre, senior portfolio manager at Sprott Asset Management.
Delegates to the London Bullion Market Association’s annual gathering predicted gold would rise to $2,941 over the next 12 months and silver to $45.
Spot silver rose 0.9% to $31.97 and headed for a weekly gain. Platinum added 1.4% to $1,005.88 and palladium increased 1.9% to $1,062.32.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu, Rashmi Aich, Janane Venkatraman and Sonia Cheema)
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