On Wednesday (October 30) during the Asian session, spot gold continued to fluctuate at high levels, with prices remaining around $2,773.72 per ounce, indicating strong demand for safe-haven assets. Recently, risks surrounding the U.S. presidential election and Middle East conflicts have risen, further driving up gold prices. On Tuesday, gold prices hit a new record high of $2,775.26 per ounce, with this wave of safe-haven buying having increased gold prices by over 34% since the start of the year.
The current market uncertainty revolves around the U.S. presidential election entering its final stage. The latest polls show that candidates Harris and Trump have support rates differing by only one percentage point, putting the election in a tight position and tightening market sentiment. Investors are concerned about how different candidate positions could impact economic policies, especially concerning the future exchange rate of the dollar and risk assets. Some market observers expect that if Trump is re-elected, the dollar may see a pullback, while Harris's election could trigger significant market volatility.
Meanwhile, the Middle East situation has also become a market focus, with ongoing conflicts in the Gaza region causing significant civilian casualties and intensifying global geopolitical risks, further strengthening gold's appeal as a safe-haven asset. Coupled with rising expectations of further rate cuts by the U.S. Federal Reserve, investors are flocking to gold and other safe-haven assets. The market anticipates a 25 basis point rate cut at the Fed's November meeting, with the total rate cuts for the year potentially reaching 43 basis points, supporting the upward trend in gold prices under this overall relaxed interest rate environment.
On the economic data front, investors will also closely monitor the upcoming U.S. "small non-farm" ADP employment data and third-quarter GDP growth data. Labor market data can directly reflect the health of the U.S. economy and is an important basis for assessing the Fed's future rate cut decisions. It is predicted that new non-farm jobs in October will fall to 115,000, a significant slowdown from September's 254,000. Changes in the labor market, particularly the decline in job vacancies, may provide more support for the Fed's accommodative monetary policy.
Additionally, the latest U.S. job vacancy data has fallen to a more than three-and-a-half-year low, indicating that hurricanes in the southern U.S. have affected labor demand, while the consumer confidence index has risen to a nine-month high, showing some resilience in the U.S. domestic economy. Overall, geopolitical tensions, election uncertainty, and a relaxed interest rate environment collectively contribute to the increased demand for gold as a safe-haven, and gold prices are likely to maintain a strong upward trend in the foreseeable future.
