Gold surged past the $2,700 mark for the first time on Friday, driven by expectations of further monetary policy easing and increased demand for safe-haven assets due to uncertainties surrounding the U.S. presidential elections and conflicts in the Middle East.
By 1145 GMT, spot gold had risen by 0.6% to $2,709.81 per ounce, after reaching an all-time high of $2,714.00 earlier in the session. So far this week, bullion has gained over 2%, with U.S. gold futures climbing 0.7% to $2,725.
“The market’s focus remains on geopolitical developments, with the ongoing tensions in the Middle East continuing to fuel uncertainty,” commented StoneX analyst Rhona O’Connell.
On Friday, Hezbollah, the militant group based in Lebanon, announced it was entering a new and more intense phase of its conflict with Israel, while Israeli Prime Minister Benjamin Netanyahu vowed to continue military operations in Lebanon and Gaza late Thursday.
The escalation in geopolitical risks has prompted investors to seek refuge in safe-haven assets like gold, as concerns over global market stability rise.
“Given the speculative interest coming from the Asian markets, it’s no surprise gold broke through the psychologically significant $2,700 level,” noted independent analyst Ross Norman. “Gold is benefiting from strong conviction trades, ignoring factors like falling inflation and Treasury yields, with little sign of consolidation or profit-taking.”
Gold has surged over 31% this year, fueled by expectations of further easing from major central banks, including the U.S. Federal Reserve, alongside geopolitical tensions.
However, in the physical gold markets, Indian dealers were forced to offer discounts this week as record high prices reduced demand ahead of a major festival.
“Technically, if gold continues its upward trajectory, it may face resistance at around $2,750 per ounce, the upper boundary of a rising trend channel observed since late July,” explained Frank Watson, market analyst at Kinesis Money.
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