Gold posts new record high at N4.5 million per Ounce

Spot gold increased 40 basis points to a record high of $2,705 (N4.49 million) per ounce, while December gold futures rose by 50 basis points to $2,720 (N4.52 million) in morning trade.

The naira traded at N1,660.49 per dollar at the official market on Thursday.

The yellow metal rose even as robust U.S. retail sales and labor market data bolstered expectations that interest rates will decrease more slowly in the coming months.

Bullion prices moved out of a narrow trading range seen in the previous two weeks, reaching fresh highs as the United States election approached.

The precious metal increased by almost 2% for the week after U.S. news on Thursday decreased bets on the extent of Federal Reserve easing.

This was because demand outweighed other economic headwinds that would typically weigh on the precious metal.

Gold is among the best-performing commodities in 2024, with gains of about 30% so far this year. Expectations of rate cuts propelled the most recent rises when the Fed started its cycle of rate reductions last month.

In the past, significant purchases of gold by central banks have also contributed to rising gold prices.

Recent polls indicate that Vice President Kamala Harris and former President Donald Trump will compete in a close presidential election race with less than three weeks until the election.

Uncertainty regarding the election’s outcome has increased due to the two candidates’ divergent positions, thereby boosting buying interest in the bullion.

Media polls indicated that Harris had a modest lead over Trump, while prediction and betting markets strongly suggested that Trump would win.

The need for gold as a safe haven grew as turmoil in the Middle East continued. After an early October missile attack by Iran, traders were prepared for Israel’s reprisal against Iran.

Israeli Prime Minister Benjamin Netanyahu stated that Israel would not cease fighting until all of the prisoners abducted by Hamas last year were freed, despite U.S. President Joe Biden’s declaration that the war should end.

In addition, the ongoing battle between Israel and Hezbollah, which Iran backs, has also prompted retail investors to turn to gold for its relative safety.

Other international economic indicators, like China’s stronger-than-expected 0.9% third-quarter growth, have been overshadowed by geopolitical threats and have had minimal effect on market sentiment. Rather, worries over the stability of the global economy have taken centre stage, which has helped sustain gold’s bullish trend.

Other international economic indicators, like China’s stronger-than-expected 0.9% third-quarter growth, have been overshadowed by geopolitical threats and have had minimal effect on market sentiment. Rather, worries over the stability of the global economy have taken centre stage, which has helped sustain gold’s bullish trend.

Gold prices remained solid despite pressure from a stronger currency as the greenback hit a two-and-a-half-month high this week.

Gold and other non-yielding assets are likely to gain strength due to the ECB’s 25 basis point cut, as major central banks worldwide prepare to cut rates.