Global uncertainties drive gold above unprecedented $2,700/oz milestone

Reuters

Global uncertainties drive gold above unprecedented $2,700/oz milestone

2024 10월 18, 오후 3:19 GMT

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Hezbollah says it will escalate war with Israel

Investors flock to safe-haven gold on Mid-East war concerns

Bullion has risen over 30% so far this year

Updates prices as of 1618 GMT

By Anushree Mukherjee and Swati Verma

Oct 18 (Reuters) -Gold surged above the historic threshold of $2,700-per-ounce on Friday, powered by escalating tensions in the Middle East, uncertainties around the U.S. elections and relaxed monetary policy expectations that pushed the metal into unchartered territory.

Spot gold XAU= gained 0.9% at $2,717.08 per ounce by 12:18 p.m. ET (1618 GMT). Prices hit a record high of $2,719.93 earlier in the session, setting bullion on track for a rise of about 2% this week.

U.S. gold futures GCcv1 climbed 0.9% to $2,732.40.

"With the conflict intensifying – particularly following Hezbollah's announcement to escalate the war with Israel – investors are flocking to gold, a traditional safe-haven asset," said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany.

Pledges from Israel and its enemies Hamas and Hezbollah to keep fighting in Gaza and Lebanon dashed hopes that the death of a Palestinian militant leader might hasten an end to escalating war in the Middle East.

Rising geopolitical tensions prompt investors to seek safe-haven assets like gold, driven by risk aversion and concerns over global market instability.

"Adding to the momentum, concerns around the U.S. presidential election and anticipation of looser monetary policies have further fuelled the rally," Zumpfe added.

Gold shattered records multiple times this year as expectations of more rate cuts by central banks and geopolitical uncertainties boosted prices by more than 30% so far this year, its best annual growth since 1979, as per LSEG data.

Lower rates enhance the appeal of bullion, which yields no interest on its own.

Sources told Reuters the ECB was likely to cut again in December unless economic data suggests otherwise. Traders are also pricing in a 92% chance of a Federal Reserve rate cut in November, according to the CME Fedwatch tool.

Max Layton, global head of commodities research at Citi, sees gold prices reaching $3,000/oz over the next 6-12 months, as a store of wealth in a time of high U.S. and European economic uncertainty, driving up ETF and investment demand.

Silver is expected to perform strongly to $35/oz over the next three months, Layton added.

Spot silver XAG= rose 3.3% to $32.74. Platinum XPT= added 2.1% to $1,012.75 and palladium XPD= gained 3.4% to $1,077.04.

Precious Metals Price Performance https://tmsnrt.rs/4f57VWL

Spot gold price in USD per oz https://reut.rs/3Yeu7XP

Reporting by Anushree Mukherjee, Swati Verma and Anjana Anil in Bengaluru; Editing by Shailesh Kuber

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