Gold climbed to a new peak on Monday, continuing its impressive rally amid uncertainties about the U.S. election, ongoing tensions in the Middle East, and interest rate cuts by major central banks. Meanwhile, silver soared to its highest level in nearly 12 years.

 

Spot gold increased by 0.6%, reaching $2,735.75 per ounce. U.S. gold futures rose by 0.8% to $2,751.

 

Thanks to the gold surge, spot silver increased by 1.2%, reaching $34.05 per ounce, its highest level since late 2012.

 

"The present market situation includes declining interest rates along with elevated geopolitical risks — conditions favoring gold on both counts," stated Tim Waterer, chief market analyst at KCM Trade.

 

Investors also reacted to the news that China reduced its benchmark lending rates after cutting other policy rates last month as part of a stimulus package to rejuvenate the economy.

 

The demand for gold in China, the top consumer, has been affected by high prices and a slowing economy.

 

In other places, traders are factoring in a 99% likelihood of a U.S. Federal Reserve interest rate reduction in November. The European Central Bank reduced interest rates by a quarter percentage point last week.

 

Typically, lower rates make gold more attractive, as bullion earns no interest. Gold is also viewed as a secure investment amidst economic and political instability.

 

The 2024 U.S. presidential contest between former President Donald Trump and Vice President Kamala Harris is very close in the seven key states that will determine the November 5 election outcome.

 

In the Middle East, hundreds of Beirut residents moved out of their homes late Sunday as multiple explosions were heard, with Israel preparing to target sites tied to Hezbollah’s financial operations.

 

Regarding gold, "$2,800 appears to be an attainable target by year-end... There might be motivation to secure some profits, potentially decelerating the immediate gains," Waterer mentioned.

 

Nonetheless, he predicted that buyers would likely be on standby for more favorable entry opportunities if any market pullback occurs.