### Gold Surpasses $2,700 Amid Middle East Tensions and US Election Fears

For the first time ever, gold prices climbed above the $2,700 mark, driven by investor anxiety over rising conflicts in the Middle East and the unpredictable U.S. election scene. Gold saw a 1% increase, reaching as high as $2,720.17 per ounce, surpassing the previous record. This surge in gold prices extended to other precious metals, with silver experiencing a notable 5.5% jump, its highest since 2012. The rising interest in silver was mirrored by a significant spike in call options for BlackRock Inc.'s iShares Silver Trust, the leading exchange-traded product for this metal.

The market's heightened state is largely attributed to recent geopolitical turmoil. Israel's announcement of the successful elimination of Hamas leader Yahya Sinwar, the mastermind behind the group's attack on southern Israel, has exacerbated tensions. Prime Minister Benjamin Netanyahu has vowed to continue military efforts until all hostages taken by Hamas last year are freed. Meanwhile, U.S. President Joe Biden has called for an end to the ongoing conflict. Such volatile scenarios have historically driven investors towards the safety of gold.

In addition to geopolitical concerns, investors are also bracing for the upcoming U.S. election on November 5. Traditional and decentralized betting polls reveal significant discrepancies, leading to uncertainty. Christopher Wong, an FX strategist at Oversea-Chinese Banking Corp., noted that "Trump hedges - long gold" might gain popularity amidst the fluid election dynamics and geopolitical strains.

The weakening of the U.S. dollar also contributed to the rise in gold prices, as the Bloomberg Dollar Spot Index fell by 0.2% after a four-day increase. A decline in the dollar's value makes gold more affordable for buyers using other currencies. Over the past week, gold has risen by about 2.4%, with the demand for safe havens outweighing the macroeconomic pressures typically weighing down the metal, despite easing Federal Reserve policies.

Gold has been one of the top-performing commodities of 2024, boasting over 30% gains this year. Recent optimism regarding interest rate cuts has further bolstered gold prices, with the Federal Reserve initiating an easing cycle last month. Consistent central bank purchases have also provided ongoing support for gold prices.

Investor behavior from Western markets has significantly influenced gold prices. While many Western investors remained cautious in the year's first half, there has been a noticeable shift following the U.S. central bank's transition to more lenient monetary policies. This shift has led to a surge in exchange-traded fund holdings backed by bullion, marking a fifth consecutive month of inflows in October, the longest stretch since 2020.

Industry professionals hold an optimistic view for the future. Attendees at the London Bullion Market Association's annual meeting predict gold prices could reach approximately $2,917 per ounce by the end of October 2025. Silver is expected to see a 40% increase, potentially climbing to $45 an ounce. As of 2:36 p.m. in New York, spot gold was trading at $2,718.72 per ounce, with palladium and platinum prices also on the rise.