Gold Prices Rise Amid Election Uncertainty

Gold prices rose in Asian trade on Tuesday, steadying just below recent record highs as traders leaned towards safe havens in anticipation of a tight 2024 presidential election.

This notion saw gold and other precious metals remain strong even as the dollar firmed amid growing expectations for the Federal Reserve to slow its rate cuts.

Spot Gold Performance
Spot gold rose 0.5% to $2,734.38 an ounce, while gold futures rose 0.4% to $2,748.40 an ounce by 00:12 ET (04:12 GMT). Spot prices hit a record high of just over $2,740 on Monday.

Gold Near Record Highs on Election Uncertainty

Recent polls indicated a close race between Donald Trump and Kamala Harris in the upcoming presidential election, taking place in about two weeks.

Uncertainties regarding the outcomes and the contrasting stances of both candidates have led traders to adopt a risk-averse stance, favoring safe haven investments. This risk aversion is expected to amplify as the election approaches.

Safe haven demand was also stimulated by fears of escalating conflict in the Middle East after an attempted drone attack on Israeli Prime Minister Benjamin Netanyahu. Israel is seen to maintain its offensive against Hamas and Hezbollah, with reports of a potential strike against Iran.

This demand helped precious metal prices endure the dollar's strengths, which rose to a near three-month high this week, buoyed by increased bets on a slower pace of Fed rate cuts that usually negatively affect metal markets.

Other precious metals also experienced gains on Tuesday. Platinum futures rose 0.4% to $1,019.60 an ounce, while silver futures increased by 0.7%, remaining close to a 12-year high recorded on Monday.

Copper Recoups Some Losses, Focus on China

Among industrial metals, copper prices stabilized on Tuesday, recovering some recent losses due to improving demand from top importer China.

Benchmark copper futures on the London Metal Exchange rose 0.7% to $9,638.50 a ton, and December copper futures increased by 0.8% to $4.3943 a pound.

Copper had suffered steep losses over the past few weeks due to underwhelming stimulus measures from China. It fell on Monday, even after the People’s Bank of China cut interest rates slightly more than expected.

Investors are keenly awaiting more details from China regarding its plans to bolster economic growth through the recently announced stimulus measures, with the National People’s Congress set to convene later in October and expected to approve additional fiscal spending for growth.