Gold nears record high before release of US economic data
Gold rose on Thursday to hover below record levels, underpinned by uncertainty surrounding the US election and expectations of more rate cuts by major central banks, while investors looked forward to a slew of US data for further direction. Spot gold rose 0.3% to $2,682.14/oz by 2.21am GMT. Prices had climbed to a session high of $2,685.16 on Wednesday, shy of the record $2,685.42 scaled on September 26.
US gold futures gained 0.2% to $2,697.40/oz. "Investors are seeking safe-haven gold as a hedge amid uncertainty over the US election. A Trump presidency should support gold as it might raise trade tension and widen the budget deficit," said Kelvin Wong, Oanda’s senior market analyst for Asia Pacific.
“In the very short term, prices could face resistance at $2,700/oz levels.” Republican presidential candidate Donald Trump defended his protectionist trade policies and other fiscal proposals on Tuesday.
The US retail sales and industrial production data for September, as well as weekly jobless claims data, are all due later on Thursday. If the retail sales data misses expectations, it could provide next leg higher for gold, analysts at SP Angel said in a note. Traders see a 92% chance of a 25 basis-points rate cut by the US central bank in November, the CME FedWatch tool showed.
The European Central Bank is likely to lower rates again, arguing inflation in the eurozone is now increasingly under control. British inflation slowed sharply in September, which reinforced bets on a Bank of England rate cut in November. Lower interest rates and geopolitical tensions tend to boost bullion, which is considered a safe asset and yields no interest.
Elsewhere, the mayor of a major town in south Lebanon was among 16 people killed when an Israeli airstrike destroyed its municipal headquarters. Spot silver rose 0.4% to $31.79/oz. Platinum gained 1.2% to $1,005.00/oz and palladium firmed 0.5% to $1,028.72/oz.