Gold Prices Surge Amid Global Uncertainty

Gold prices hit a record high in Asian trade on Monday, extending last week’s rally as uncertainty surrounding the U.S. election and anticipation of Israel's retaliation against Iran drove safe haven demand.

Other precious metals also advanced, particularly silver, which raced to a 12-year peak. Industrial metal prices, particularly copper, firmed following an interest rate cut in top importer China.

Despite the dollar remaining near its highest levels since early August, traders adjusted expectations for a slower pace of interest rate cuts by the Federal Reserve.

Spot gold increased by 0.4% to a record high of $2,732.86 an ounce, while gold futures expiring in December rose by 0.6% to $2,747.70 an ounce.

Increased Safe Haven Demand

Precious metals prices were buoyed by increased safe haven demand, especially after reports indicated Israel was planning a strike against Iran following a missile attack earlier in the month. Tensions in the Middle East continued as hostilities between Israel, Hamas, and Hezbollah persisted.

Traders favored safe havens before the imminent U.S. presidential elections in early November, with analysts from ANZ noting the race was “too close to call.” Recent polls showed Donald Trump and Kamala Harris nearly neck-and-neck, although prediction markets favored a Trump victory.

The demand for safe havens buoyed precious metals amid signs of resilience in the U.S. economy, with traders anticipating a slower pace of Fed rate cuts, expected to be around 25 basis points in November.

Silver futures surged by 3.1% to $34.328 an ounce, the highest level since September 2012, while platinum futures increased by 0.6% to $1,031.15 an ounce.

Copper Prices Rise with China’s Rate Cut

Amid industrial metals, copper prices rose following an unexpectedly large interest rate cut by top importer China. Benchmark copper futures on the London Metal Exchange rose by 1.2% to $9,746.0 a ton, and December copper futures also increased by 1.2% to $4.4450 a pound.

The People's Bank of China cut its benchmark loan prime rate slightly more than anticipated, part of a series of stimulus measures from Beijing. However, traders found earlier signals of stimulus somewhat underwhelming, as the timing and scale of planned measures were not fully detailed, leading to previous week’s steep losses in copper prices.