Gold has surged to a new record in early Asian trading on Wednesday as traders assessed the latest US economic data and considered potential market disruptions with the upcoming presidential election on the horizon. Bullion climbed to $2,775.47 an ounce, surpassing the previous record set on Tuesday.

Spot gold was little changed at US$2,775.06 an ounce as of 6.57 am in Singapore. The Bloomberg Dollar Spot Index slipped by 0.1%, while silver remained steady after exceeding US$34 an ounce on Tuesday. Both palladium and platinum were flat.

The latest report indicated that US job openings have fallen to their lowest level since early 2021. This data contrasts with September's report, which suggested a still-strong labour market, leading traders to scale back expectations of another significant interest rate cut by the Federal Reserve. Generally, higher borrowing costs negatively impact gold prices.

Economists expect policymakers to reduce rates by a quarter percentage point at the US central bank's next policy meeting on 6-7 November. Ahead of this, traders are keenly watching more US economic figures set to be released later this week, including inflation and payroll data, which may provide further clues on the Fed's easing trajectory into 2025. The reports are anticipated to highlight underlying resilience in the economy, though the labour market has seen disruptions due to two hurricanes.

"Market positioning is elevated ahead of the election but also in anticipation of further Fed rate cuts and broader market and geopolitical uncertainty," said Standard Chartered Plc analyst, Suki Cooper, in a note. "Under a Trump-win scenario, markets are focused on the implications of wider tariffs, as well as inflationary pressures stemming from such tariffs."

Gold has increased by over a third this year, driven by central-bank buying and safe-haven demand amid ongoing conflicts in the Middle East and Ukraine. Investors are also keeping a close eye on the closely contested US presidential election between Vice President Kamala Harris and former President Donald Trump, with the outcome's uncertainty reinforcing gold's status as a safe investment.

Reuters