Spot Gold registered a fresh all-time high of $2,732.88 per troy ounce on Monday amid heightened Middle East tensions, uncertainty regarding the US presidential election as well as lower interest rates by central banks.
Tensions rose after Hezbollah announced last Friday that it was entering a more intense phase in its conflict with Israel.
Meanwhile, hundreds of Beirut residents left their homes over the weekend, as Israel prepared to launch an assault on sites linked to Hezbollah’s financial operations.
On the political front, the contest between former US President Donald Trump and Vice President Kamala Harris is neck and neck in the seven battleground states, which will decide the outcome of the November election, opinion polls showed.
On the central bank monetary policy front, markets are now pricing in about a 99% chance of a rate cut at the Federal Reserve’s policy meeting in November.
The European Central Bank lowered interest rates last week for the third time this year.
Lower interest rates reduce the opportunity cost of holding Gold, which pays no interest.
“The current market environment consists of interest rates moving south combined with heightened geopolitical risks – a scenario which suits gold on both fronts,” Tim Waterer, chief market analyst at KCM Trade, was quoted as saying by Reuters.
“$2,800 looks to be a viable year-end target… There will be temptation to lock in some profits, which could slow the immediate upside,” Waterer added.
As of 7:11 GMT on Monday Spot Gold was gaining 0.37% to trade at $2,732.06 per troy ounce.
Gold Futures for delivery in December were gaining 0.59% on the day to trade at $2,746.10 per troy ounce.