Gold topped $2,700 an ounce on Friday for the first time ever, extending gains supported by expectations of more easing monetary policy and safe-haven demand due to uncertainty over the U.S. presidential election and conflicts in the Middle East.
Spot gold rose 1 percent on Friday to $2,720.25 an ounce. Gold has risen about 2.4 percent this week.
US gold futures also reached $2,730 at settlement.
“As the conflict escalates, especially after Hezbollah announced an escalation of the war with Israel, investors are turning to gold, a traditional safe haven asset,” said Alexander Zumpe, a precious metals trader at German firm Heraeus Metals, according to Reuters.
Vows by Israel, Hamas and Hezbollah to continue fighting in Gaza and Lebanon have dashed hopes that the killing of Hamas political chief Yahya Sinwar could hasten an end to the escalating war in the Middle East.
Increased geopolitical tensions are pushing investors to seek safe assets such as gold to avoid risk and due to fears of global market instability.
Adding to the momentum, concerns over the US presidential election and expectations of more accommodative monetary policies fuelled the rally further, Zumbe said.
Gold has topped its record high several times this year due to geopolitical tensions and expectations that major central banks will continue to ease monetary policy, leading prices to rise more than 30 percent since the start of the year in the best annual growth since 1979, according to data from the London Stock Exchange Group.
Low interest rates make holding non-yielding gold even more attractive.
The European Central Bank is likely to cut interest rates again in December unless economic data prompts it not to, sources told Reuters.
Investors see a 92 percent chance the Federal Reserve will cut interest rates in November.
Among other precious metals, spot silver rose 6 percent to $33.58 an ounce, platinum rose 2.4 percent to $1,016.25, and palladium rose nearly 4 percent to $1,083.25.
