Gold price reaches new record high

The spot price of gold surpassed 2,700 dollars per ounce for the first time ever. Analysts say global investors are flocking to risk-free assets as tensions in the Middle East escalate ahead of the U.S. presidential election.

According to Bloomberg on Friday, international gold prices hit a record high of 2,707.84 dollars per ounce at one point in Asian financial markets. Spot gold, which was trading at around 2,000 dollars per ounce at the start of the year, has risen more than 30 percent in price so far this year.

Rising geopolitical tensions in the Middle East have driven recent strength in gold prices, which have attracted investors to the risk-free metal. The previous day, Israel said it had eliminated Yahya Sinwar, the top leader of the political bureau of the Palestinian militant group Hamas. “The war is far from over,” Israeli Prime Minister Benjamin Netanyahu said in a video. The new phase of conflict in the Middle East has spurred the buying of gold, one of the safest assets.

Other factors holding up gold prices include the U.S. Federal Reserve’s “big cut” of its benchmark interest rate by half a percentage point last month amid uncertainty over next month’s U.S. presidential election and central banks around the world buying gold. The London Bullion Market Association recently released a survey of experts who believe the price of gold will surpass 2,900 dollars by October next year. Since gold doesn’t bear interest, its price is generally more likely to fall in a high-interest-rate environment, but it has risen about 31 percent this year. That’s the second-highest gain among major commodities after silver, the price of which increased by 34 percent.


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