Gold continues to soar

The precious metal has continued its dynamic upward trajectory of setting daily new record highs, despite the further rise in government bond yields, which under normal circumstances would represent a headwind to the gold price. Commodities, especially oil, saw significant losses in recent days.

The central reason for the gold price rally is the US presidential election, coming up next week. The uncertainty surrounding its outcome and consequences is causing major investors to turn to gold as a safe haven, keeping in mind its hedging character against market turbulence and setbacks in other markets. The possible consequences of the US election’s outcome for the US national debt remain a hotly debated topic, with many analysts forecasting the degree of its rise  in the coming years will depend entirely said outcome.

Gold rally likely to continue

We will have to wait and see if a reliable result will be available by the middle of next week for the financial markets to process. The higher the uncertainty among market participants, the more strongly the gold price is likely to develop:

Last Wednesday morning, gold traded at 2,753 US$ per ounce. Although it dropped to 2,717 on Friday, it closed the week at just under 2,750. After a sideways day on Monday, the precious metal then jumped from one record high to another, reaching 2,790 last night. It starts today’s European trading at around 2,785 US$ per ounce.

Xetra-Gold reaches new all-time high

Xetra-Gold also jumped from record high to record high. From 81.95 € per gram last Wednesday morning, it initially weakened to 80.70 on Friday. Since the beginning of the week, it has more than recovered, marking a new all-time high of 82.85 yesterday afternoon. This morning (as of 7:00) Xetra-Gold was expected to start the European trading day at around 82.50 € per gram.
The US elections and their outcome will remain the dominant topic on financial markets in the coming weeks. The US Federal Reserve will likely receive the attention it deserves next week with a widely anticipated further interest rate cut.

I wish all readers well-behaved trick-or-treaters and a good start into November.