XAU/USD: Gold Extends Record Run with Prices Surging Above $2,790. What’s Next?

Large slate of economic data will continue to keep gold bugs excited about growth prospects. Middle East conflict quietly underpins demand.

• Gold XAUUSD printed a new record high Wednesday morning as traders and investors dug into their pockets to bump up the prices to yet another lofty level. The precious metal rose 0.5% in the early hours, adding to Tuesday’s 1.5% gain and topping $2,790 per ounce for the first time ever. For the year, gold is up a massive 36%, outshining the broad-based S&P 500, which is up 23% for the same time span.
• The gold market has rarely been involved in such a mosaic of data and developments on virtually all fronts. First off, the Middle East conflict continues to add fuel to prices because gold is considered a safe-haven asset and demand for it picks up in uncertain times for geopolitics. Secondly, the monetary policy outlook is heavily leaning in favor of gold prices — a sweeping wave of lowering interest rates from central banks reduces the opportunity cost of holding gold, which gets more attractive against lower rates.
• What’s next for gold? An avalanche. No, really. The looming US election on November 5 will likely infuse tons of volatility, especially if it’s a neck-and-neck situation. But before that, gold fluctuations may hit your screens today with the release of the US gross domestic product data followed by Thursday’s PCE report — that’s the Federal Reserve’s favorite inflation gauge. To top it off for the week, October’s nonfarm payrolls printout hits the deck on Friday.