International gold prices reached new highs on the 21st, continuing their upward trajectory after breaking the $2,700 mark during trading on the 18th. The escalating situation in the Middle East, particularly reports of Israel contemplating attacks on Iran and targeting financial institutions allegedly linked to Hezbollah for bombings, has contributed to investor anxiety. Additionally, on the 20th, a drone dispatched by Hezbollah exploded near Israeli Prime Minister Netanyahu’s residence. At the same time, the U.S. presidential race is intensifying, creating an environment where investors are increasingly turning to gold as a safe haven.
On the 21st, spot gold prices briefly increased by 0.66%, hitting $2,739.35 per ounce. If this momentum continues through the New York close, it would mark the fifth consecutive day of setting a new historical high. The rise in gold prices has been fueled by central bank purchasing, safe-haven demand, and asset diversification, with gold gaining over 30% this year—outperforming both U.S. stocks and bonds.
Last weekend, Israel expanded its bombing operations in Lebanon, targeting institutions it accuses of providing financial support for Hezbollah’s military efforts. Reports from Lebanese media indicated that Israeli forces conducted at least 11 strikes in the southern suburbs of Beirut on Sunday night.
President Biden and his administration have been actively urging Israel to revive ceasefire negotiations with hostile factions, but Israel’s response has been staunch and uncompromising.
Traders are also repositioning their investment portfolios ahead of the American presidential election set for November 5. Polling indicates that the competition between Trump and Harris could be one of the closest races we’ve seen in the past two to three decades. Traditionally, investors have opted for gold as a hedge during times of geopolitical and economic uncertainty.
Gold has emerged as one of the best-performing commodities this year, particularly following the Federal Reserve’s announcement last month regarding interest rate cuts, which has created a wave of optimism in the market. Central bank buying remains a long-term pillar for the gold market.
In a report released on the 21st, CBA analyst Darrell forecasts that gold futures could average $3,000 per ounce by the fourth quarter of 2025. He suggests that the Fed’s easing cycle may weaken the dollar, making gold, priced in dollars, cheaper for many buyers due to currency depreciation.
However, some analysts are bearish on gold’s future. Blue Line Futures Chief Market Strategist Stapleton notes that gold faces several minor headwinds, including revitalization efforts in mainland China, a strengthening dollar, a weakening euro, declines in base metals, and profit-taking pressures.
