Sword finger 2,700 dollars? Gold is once again approaching a record high. Investors weigh the US election and the Fed's interest rate trends

The Zhitong Finance App learned that as investors turn their attention to the upcoming US election, the price of gold is approaching a record high. Polls predict that in less than three weeks, the US election competition will be very intense.

According to the data, spot gold once rose 0.8% to 2682.39 US dollars per ounce, close to the historical record of 2685.58 US dollars set last month. So far this year, the price of gold has risen by about 30%.

All precious metals were also higher, with silver rising by nearly 1.5% at one point. The US dollar spot index stabilized near a two-month high.

Gold was one of the strongest performing commodities in 2024. Due to its appeal as a safe-haven asset and the central bank's heavy purchases, the price continued to set records. Today, gold has received new support as investors in financial markets reorient their portfolios to deal with the uncertainty of the US presidential election results.

On Tuesday, Republican candidate Trump said in an interview that he would drastically raise tariffs, cut taxes and regulations, and seek more direct negotiations with the Federal Reserve, after which the dollar rebounded. Meanwhile, market veterans said that in the options market, traders pay more attention to the Federal Reserve's interest rate cuts and the health of the US economy.

Analysts led by UBS Global Wealth Management Chief Investment Officer Mark Haefele said in an email: “We expect uncertainty and volatility to rise until the next US administration finalizes.” They suggest that in a volatile trading environment, “gold and oil can be effective portfolio hedging tools.”

Currently, the general opinion of Wall Street economists is that Trump's trade policy will ultimately support the dollar, as import tariffs will prevent the dollar from flowing overseas and may drive up inflation and interest rates. The long-term trade war will also suppress global risk sentiment and further support the safe-haven dollar.

This situation could adversely affect gold. This asset often performs well in times of inflationary and geopolitical turbulence, but may be affected when the dollar strengthens and interest rates are high.

Over the past year, the Fed's interest rate hike has hardly slowed the rate at which gold has continuously reached record highs. Currently, many investors are betting that the shift to loose monetary policy and the subsequent slowdown in US economic growth will help drive further growth.

According to a survey of the gold industry conducted at an important annual conference, the price of gold is expected to rise to record highs over the next year. Delegates at the London Bullion Market Association event in Miami expect that by the end of October next year, the price of gold will rise to 2917.40 US dollars per ounce, which is about 10% higher than the current level.