Driven by the Middle East conflict and the catalysis of the usa elections, the frenzy of gold has become unstoppable, and the price of gold has already soared to $2780.

On Wednesday, spot gold broke through the $2780 mark, hitting a new all-time high.

Since October, spot gold has successively broken through the key levels of $2770 and $2780, currently up nearly $120, with a monthly increase of over 5.5%.

So far this year, spot gold has shown a fierce upward trend, with a cumulative increase of nearly 35% in the year, becoming one of the best-performing assets of 2024.

LSEG Workspace data shows that if the market stays around current levels, this year's gold price will be the highest annual increase since 1979.

The frenzy of gold price

Behind the soaring gold price are mainly factors such as the Middle East conflict, usa inflation, and the usa-japan elections.

Firstly, the geopolitical conflicts in the Middle East are escalating, and the situation between Iran and Israel is deteriorating.

Over the weekend, Israel launched retaliatory actions against Iran, and Iran has vowed to respond.

According to local media reports on the 29th, Israel is considering launching a new round of attacks against Iran. The Chief of Staff of the Israeli military also stated that if Iran makes another mistake, the Israeli military will visit Iran again.

Facing the high pressure from Israel, the Iranian Foreign Minister pointed out that the response measures will not be delayed or rushed. In addition, the Iranian government plans to increase its military budget by about 200% next year.

Currently, the situation in the Middle East is becoming increasingly complex. Israel has once again bombed the northern Gaza Strip, with the attacks resulting in at least 93 Palestinians dead or missing.

Secondly, the catalysts are the inflation in the USA and the Fed's interest rate cuts.

The U.S. economic data released on Tuesday showed a much larger than expected drop in employment positions, while consumer confidence exceeded all expectations.

The market is currently waiting for more data such as non-farm payrolls to be released later this week to further determine the Federal Reserve's interest rate stance.

The Federal Reserve has two more meetings this year. Next week, the Fed will hold its November policy meeting, conveniently timed after the results of the US presidential election are announced.

Currently, investors almost unanimously believe that there will be another 25 basis point rate cut in November.

However, many Wall Street giants recently believe that there may only be one more rate cut this year, whereas previously it was widely expected that there would be two rate cuts before the end of the year.

Finally, with the US presidential election approaching, the competition for the White House is extremely fierce.

Currently, the showdown between Trump and Harris has entered the final sprint, with the market increasingly betting that Trump will have the last laugh.

According to the latest forecast from the political gambling website Polymarket, Trump's chances of winning the presidency have risen to 66.3%, while Harris has fallen to 33.8%.

In addition to the US election, the recent Japanese election is also full of uncertainties, with the newly appointed Yoshihide Suga possibly becoming the "shortest-serving prime minister".

According to Japanese media reports, the latest opinion polls show that Prime Minister Yoshihide Suga's cabinet approval rating has dropped to 32.1%. Japan will hold a prime ministerial nomination election on November 11th.

Now, the Bank of Japan also dares not to act rashly.

After the last unexpected rate hike caused turmoil in the global markets, the Bank of Japan is now closely watching the impact of the US-Japan election on its economy and financial markets.

The focus this Thursday is: Will the Bank of Japan send out any signals regarding the timing of the next rate hike?

Currently, about 87% of Bank of Japan observers expect a rate hike by the end of January next year, with 53% of observers expecting a hike in December.

However, some economists caution that a rate hike in December is still not completely impossible, which also means the foreign exchange market must be wary of 'black swan' events.

Is the price of gold aiming for $3,000 next year?

With increasing global uncertainties, financial markets have added more variables, making gold, as a safe haven asset, increasingly favored by the market.

So, will the future of gold continue to soar?

Han Tan, Chief Market Analyst at Exinity Group, stated that as long as the risks of the USA election continue to impact market sentiment and the Fed's interest rate cut expectations remain unchanged, the gold price should maintain an upward trend, potentially reaching $2800 in the coming days.

Shengbao Bank pointed out that despite the decrease in risk premiums in other markets, the gold price rose this week, confirming that people's focus is still on the USA election, especially the prospect of Trump 2.0.

"This may bring about greater policy confusion, trade tariffs, and increased geopolitical risks."

Peter Grant, Vice President and Senior Metal Strategist at Zaner Metals, stated that due to ongoing geopolitical tensions and political uncertainty, gold is supported by safe-haven bets, with Japan also joining the ranks of political uncertainty after the weekend election.

Goldman Sachs, which has been bullish on gold multiple times this year, latest indicated that with central banks (especially those in emerging markets) actively buying gold, next year's gold price will rise to $3000.

The bank forecasts that by early 2025, the gold price will reach $2900 per ounce, higher than the previous forecast of $2700. By December 2025, the gold price is expected to rise by about 10% to reach $3000 per ounce.

Editor/Rocky