Gold prices reached a record high in London on Friday, driven by safe-haven demand amid an approaching election in the U.S. and the European Central Bank’s interest rate cut aimed at boosting spending.
Spot gold climbed 40 basis points to $2,705 (N4.49 million) per ounce, while December gold futures rose by 50 basis points to $2,720 (N4.52 million).
Meanwhile, the naira traded at N1,660.49 per dollar in the official market on Thursday.
The yellow metal prices increased despite strong U.S. retail sales and labor market data, which raised expectations for a slower decline in interest rates in the coming months.
Bullion prices broke out of a narrow trading range observed over the past two weeks, hitting fresh highs as the U.S. election nears.
The precious metal rose nearly 2% for the week after Thursday’s U.S. news reduced expectations for significant Federal Reserve easing. Demand for gold outweighed typical economic challenges that might negatively impact prices.
So far in 2024, gold has been one of the best-performing commodities, with approximately 30% gains this year. The recent price increases were driven by expectations of rate cuts, particularly following the Fed’s start of its rate reduction cycle last month.
In the past, substantial gold purchases by central banks have also played a key role in driving up gold prices.
Recent polls show a close presidential race between Vice President Kamala Harris and former President Donald Trump, just weeks before the election. The uncertainty surrounding the candidates’ differing positions has heightened interest in gold as a safe haven.
While media polls suggest Harris holds a slight lead, prediction and betting markets indicate a strong likelihood of a Trump victory.
Additionally, ongoing turmoil in the Middle East has further increased demand for gold, especially following an early October missile attack by Iran, with traders anticipating Israel’s response.
