Gold and Silver Finely Tracking Each Other, Remain Boosted by Numerous Growing Political Risks, Central Banks’ Buying and a More Dovish Monetary Environment

Gold (XAUUSD), after a short break, rose for a fifth straight day today, on Monday October 21, to a record high, while silver (XAGUSD) hit a nearly 12-year high, amid uncertainty over the U.S. election, ongoing tensions in the Middle East and expectations of rate cuts from Fed and other key central banks. Spot gold rose 0.5% to $2,733 an ounce as of writing this, having previously hit an intraday record high of $2,737 earlier in the session. U.S. gold futures rose 0.7% to $2,750 an ounce. Gold, notoriously seen as a hedge against political and geopolitical uncertainty, has risen 32% so far this year. Gold is also supported by continued strong demand from central banks. As a result, gold prices could reach as high as $2,900 an ounce in the next 12 months, also supported by further rate cuts from the Federal Reserve.

According to the CME FedWatch tool, traders see a 90% chance that the Federal Reserve will cut interest rates in November. Supported by concerted gains in precious metals this year, spot silver prices rose to $34 an ounce, the highest since late 2012. Any decline in silver prices could turn the $32.60 per ounce resistance level into a new support.