Gold prices surged past the US$2,700 per ounce mark for the first time in history on Friday, as investors positioned for further potential rate cuts from Federal Reserve officials amid escalating tensions in the Middle East and U.S. election uncertainties.
By 2:30 pm AEDT, (3:30 am GMT) spot gold added $15.7 or 0.6% to US$2,708.62 per ounce as of 0220 GMT, with a nearly 2% gain over the week.
In other precious metals, spot silver gained 0.5% to $32.01 per ounce and platinum rose by 0.4% to $1,009.4.
Despite U.S. economic data pointing to a stronger economy, with the dollar and Treasury yields rising, traders are still anticipating a 93% chance of a Federal Reserve interest rate cut in November, according to the CME FedWatch Tool.
Additionally, the European Central Bank made its third interest rate cut this year as the Eurozone economy continues to struggle.
Tensions in the Middle East escalated further after Hezbollah vowed to intensify its conflict with Israel following the killing of Hamas leader Yahya Sinwar.
As the U.S. presidential election approaches, with less than three weeks remaining, Vice President Kamala Harris and former President Donald Trump are vigorously campaigning for last-minute voter support.
Gold’s appeal is boosted by lower interest rates, which make non-yielding bullion a safer investment during times of political and economic uncertainty.