Gold leapt to yet another historic record high on Wednesday as the yellow metal reaped the benefits of Middle East uncertainty, hopes of further monetary policy easing and potential risks around US presidential elections.
Gold reaches new record high
Spot gold advanced to USD2,750.15 an ounce around 1200 GMT on Wednesday from USD2,738.48 on Tuesday. Silver inched up to USD34.57 an ounce from USD34.49.
Bullion reached an all-time high on Wednesday, driven by geopolitical uncertainty and expectations of more accommodative monetary policies, xs.com analyst Antonio Di Giacomo said.
The yellow metal hit around USD2,758 an ounce in intraday trade on Wednesday. It has surged 40% over the past 12 months.
The rally in gold price reflects growing investor concern about global economic and political stability, particularly in light of the US elections and the conflict in the Middle East, Di Giacomo said.
Amerians got to the polls on November 5 to elect a new president.
"One of the main factors behind this surge is the electoral uncertainty in the US, which has caused greater volatility in financial markets," the xs.com analyst said, adding: "As the elections draw near, speculations about potential changes in the country's economic policy are prompting investors to seek more stable assets, such as gold."
"Investments in gold typically rise during periods of conflict as investors look to safeguard their capital against international instability," Di Giacomo said.
"Additionally, expectations of more flexible monetary policies, such as potential interest rate cuts by central banks, contribute to the increased demand for this precious metal," he said.
Some analysts project that gold could surpass the USD3,000 per ounce mark by early next year.
