Gold hit an all-time high in early trade on Wednesday, as investors flocked to the yellow metal as a safe haven less than a week before the U.S. presidential election, while awaiting economic data for clues on the Federal Reserve's expected decision on interest rates.
Update prices
Spot gold was up 0.2 percent at $2,779.39 per ounce by 0308 GMT, after hitting an all-time high of $2,782.03 earlier in the session.
U.S. gold futures rose 0.4 percent to $2,791.70.
“Gold is highly correlated with the outcome of the US election,” said Kelvin Wong, senior market analyst for Asia-Pacific at OANDA. “In the near term, spot gold will face resistance at $2,800 and then $2,826,” Reuters reported.
The November 5 election is in its final stages, and the latest polls indicate a tight race between Donald Trump and Kamala Harris.
Other factors that contributed to gold's record high were expectations of further U.S. interest rate cuts. Low interest rates reduce the opportunity cost of holding non-yielding gold.
Federal Reserve policymakers are almost certain to cut short-term borrowing costs by a quarter point next week, as a Labor Department report showed job openings fell in September to their lowest level since January 2021.
If we see hot inflation numbers or a strong jobs report, there could be a divergence in gold prices, Wong added.
Other important data sets due this week include the employment report at 1215 GMT on Wednesday, US personal consumption expenditures on Thursday, and the payrolls report on Friday.
Moreover, Goldman Sachs lowered its gold price forecast from $3,080 to $3,000 by December 2025, but maintained its bullish stance.
As for other precious metals, silver in spot transactions fell 0.3 percent to $34.33 per ounce.
Palladium fell nearly 1 percent to $1,210.72 an ounce, while platinum rose 0.1 percent to $1,046.89.
