Key points:
- Gold has risen 33% so far this year
- Traders see 88% chance of a 25-bp US rate cut in November
- Silver’s physical shortage provides strong support – analyst
Gold prices hit record highs on Wednesday, as investors grew anxious about a tight U.S. presidential race and loaded up on safe-haven investments, while silver traded close to its highest in 12 years.
Spot gold GOLD gained 0.1% to $2,750.68 per ounce as of 1129 GMT after hitting a record high of $2,758.37 earlier in the session. U.S. gold futures 
GOLD edged 0.2% higher to $2,764.30.
“It’s the uncertainty related to the U.S. election and rising debt burden in the U.S. They have to issue billions of dollars of debt as well just ahead of the election into a relatively thin and nervous market,” said Ole Hansen, head of commodity strategy at Saxo Bank.
“The risk of additional spending raising the debt burden even more is what’s driving this safe-haven demand into investment metals right now.”
Democratic U.S. Vice President Kamala Harris held a marginal 46% to 43% lead over Republican former President Donald Trump, a new Reuters/Ipsos poll found.
Economic uncertainty and geopolitical tensions boost non-yielding bullion, which has hit multiple record highs and surged over 33% so far this year to become one of the best-performing assets of 2024.
Gold got a boost after the U.S. Federal Reserve initiated its cycle of rate reductions last month with a significant 50-basis-point cut.
The odds of a similar move by the Fed in November have faded entirely, but traders see an 88% chance of a quarter-basis-point cut, the CME FedWatch tool showed.
Spot silver 
XAGUSD1! fell 0.8% to $34.57 per ounce after hitting its highest since late 2012 at $34.87 in the previous session.
“The gold/silver ratio, currently standing at around 80, means silver tends to benefit as a natural consequence of gold’s push into new territory on the upside,” Kinesis Money said in a note.
Silver’s physical shortages also provide strong support for the metal, said Michael Langford, chief investment officer at Scorpion Minerals.
Platinum 
PL1! rose 0.2% to $1,031.34 and palladium 
XPDUSD1! dropped 0.4% to $1,071.75.
**Record Gold Prices Amid U.S. Election Uncertainty:**
Gold prices surged to record highs as investors sought safe-haven assets amidst uncertainty in the U.S. presidential race. The market saw increased anxiety, leading to a spike in demand for gold. This trend is further fueled by concerns over rising debt in the U.S.
**Insight:**
– Political instability traditionally raises demand for gold as a store of value during uncertain times.
– Economic impacts of the election outcome could further boost gold prices in the near future.
**Silver’s Strong Performance:**
Silver also experienced a notable uptick, trading close to its highest level in 12 years. Analysts note that physical shortages of silver are underpinning its price.
**Insight:**
– Silver is often seen as a more affordable alternative to gold, attracting investors looking for precious metals.
– The gold/silver ratio can indicate market trends, with silver benefiting from gold’s upward movement.
**Federal Reserve’s Rate Policies:**
Gold’s rally was supported by the U.S. Federal Reserve’s rate cuts, with traders expecting further monetary easing. The Fed’s actions have a significant impact on precious metals markets.
**Insight:**
– Changes in interest rates can alter the attractiveness of non-interest-bearing assets like gold and silver.
– Anticipation of future rate cuts can drive investors towards gold as a safe-haven investment.
**Platinum and Palladium Movements:**
While gold and silver lead the surge, platinum also saw a price increase, while palladium experienced a slight decline. These movements reflect broader trends in the precious metals market.
**Insight:**
– Platinum and palladium prices are influenced by factors such as industrial demand and supply constraints.
– Diversification across different precious metals can be a strategy for investors to manage risk and optimize their portfolio.
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