Gold close to new high ahead of key data releases

by Sybilla Gross

Gold advanced toward a record as traders prepared for key data that will help to set the stage for the next Federal Reserve policy decision, while the countdown to the US presidential election continued.

Bullion rose above $2,752 an ounce as investors waited for inflation and payroll figures this week, with the reports set to show underlying resilience in the economy and a hiccup in the labor market after two hurricanes. Economists still expect policymakers to cut rates by a quarter percentage point at their Nov. 6-7 meeting. Lower borrowing costs aid the non-interest bearing metal.

Gold has surged by about a third this year, notching a record last week, with long-standing support from central-bank buying and sustained haven demand. The tight US presidential election between Kamala Harris and Donald Trump has underscored bullion’s role as a place of safety for investors. The metal has posted three consecutive weekly gains despite rising Treasury yields, normally a headwind for the commodity.

“All things still point higher for gold, expect for one thing - the great run it has had already,” said Charu Chanana, a strategist at Saxo Capital Markets Pte. Still, momentum, haven demand, and US fiscal risks will likely continue to be in focus heading into the election, offsetting risks from higher yields and the US dollar, Chanana said.

Money managers have played their part supporting gold’s advance, with hedge funds raising net-long positions and investors adding to exchange-traded fund holdings.

Spot gold traded 0.4% higher at $2,752.34 an ounce at 11:50 a.m. in Singapore, after earlier rallying to $2,757.77, less than $1 away from the record. The Bloomberg Dollar Spot Index was steady. Silver rose toward $34 an ounce, while palladium and platinum also gained.

Copyright Bloomberg News