Gold continues to benefit from safe-haven demand as it reaches another record high ahead of the U.S. election next week.
The spot price of gold has risen to $2,766.52 per ounce, breaking a previous high set last week. The price of gold has now climbed by a third so far this year. Research conducted by Goldman Sachs has said gold could reach the $2,900 mark in early 2025, with several analysts previously telling Newsweek the $3,000 milestone isn’t far off.
Gold is considered a safe-haven investment, particularly during times of international turmoil, such as Russia’s ongoing invasion of Ukraine, the Israel-Hamas war and political uncertainty, with the U.S. presidential election less than a week away. According to a report by Reuters, gold prices have surged more than 34 percent in 2024 so far.
“Gold is very much being anchored on the U.S. election outcome. In the near term, spot gold will face resistance at $2,800, then followed by $2,826,” Kelvin Wong, OANDA’s senior market analyst for Asia Pacific, told Reuters.
Democratic nominee, Vice President Kamala Harris, and Republican pick, former President Donald Trump, are entering the final stretch of their campaigns for the White House, with the election on November 5. Recent polls indicate a win could be narrow for either candidate, with several key swing states currently too close to call.
A spike in gold prices during a time of significant geopolitical unrest comes as no surprise, Michael Martin, vice president of market strategy at TradingBlock, told Newsweek.
“Ongoing conflicts, such as the war in Ukraine and tensions in the Middle East, have driven investors toward safe-haven assets like gold,” Martin said. “Global tensions have historically coincided with spikes in gold prices. For example, during the 1979 Soviet invasion of Afghanistan, gold more than doubled in value.”
“Concern about the risk of financial sanctions is likely one of the reasons central banks have increased their buying of gold,” Goldman Sachs reported. “Emerging market central bank purchases of gold have risen notably since the freezing of Russian central bank assets in 2022, following Russia’s invasion of Ukraine.”
For example, China purchased a total of 29 tonnes of gold between January and April this year, according to a September report by the World Gold Council, although this buying spree has now eased off.
There has also been a surge of new buyers this year, Nick Fulton, managing partner at USA Pawn, previously explained to Newsweek.
“As a brick-and-mortar seller, we are seeing many first-time buyers. With gold seeing an increase of 25 percent in value in the last six months, it is attracting new investors,” Fulton said.