The price of gold rose moderately, reaching a historic high, as uncertainty surrounding the US presidential election increased demand for safe haven assets. Expectations of further easing of the Fed's monetary policy also gave a boost to gold, while a stronger US dollar limited the precious metal's gains.
Experts said that gold was seen as a hedge against uncertainty surrounding the US election, and if Trump wins, the rise in precious metal prices is likely to continue, as this could heighten trade tensions and widen the budget deficit.
Today, investors will focus on US retail sales data for September and weekly applications for unemployment benefits, and if they turn out to be below economists' forecasts, this may affect expectations of easing the Fed's monetary policy. According to the CME FedWatch Tool, markets see a 92.1% probability of a 0.25% rate cut at the November meeting (compared to 83.3% a week earlier) and a 84.3% probability of a 0.25% rate cut in December (compared to 78.9% a week earlier), with a 0.46% rate cut expected by the end of the year. Lower interest rates reduce the opportunity cost of holding bullion.
Meanwhile, the European Central Bank is likely to cut interest rates again at its meeting today. While, UK inflation slowed sharply last month, which reinforced bets on a Bank of England rate cut next month.