During the Asian session on Friday, spot gold broke through the key level of $2700 per ounce for the first time in history, climbing around 0.7% to $2711.99 per ounce as of the time of publication, setting a new record high from the previous trading day. US gold futures rose by 0.5% to $2722. The continuous rise in gold prices is due to the fear surrounding the US election and the imminent tension in the Middle East which boosted safe-haven demand, along with the accommodative monetary policy environment adding fuel to the rise in gold prices.

Israel announced the killing of Hamas leader Yahya Sinwar, who was the mastermind behind attacks on southern Israel by the Palestinian organization last October, triggering a year-long Gaza conflict. Israeli Prime Minister Netanyahu stated that Israel will continue to fight until all hostages taken by Hamas last year are released, despite US President Biden's call for the war to end. During times of geopolitical and economic uncertainty, investors often seek the safety of gold.

Investors are readjusting their portfolios ahead of the US election on November 5th.

OCBC Bank's forex strategist Christopher Wong said, "There has been a clear divergence between traditional polls and decentralized polls, even as we get closer to the election. Given the fluidity of the election outcome and geopolitical uncertainties, the 'Trump hedging' – going long on gold – could still remain attractive."

Meanwhile, the Bloomberg Dollar Spot Index fell by 0.1%, ending a four-day rally. As gold is priced in dollars, a weaker dollar makes the metal appear cheaper to many buyers. Wong added, "From a technical standpoint, the dollar's rally is starting to show signs of vulnerability, hence a near-term pullback cannot be ruled out."

"Gold scoffs at the dollar's rise and rebounds whenever there is an opportunity. This is just a bullish market with no signs of exhaustion," said New York-based independent metal trader Tai Wong.

Gold rose by about 2% this week, as risk aversion surpassed other macroeconomic factors that would typically put pressure on precious metals following a reduction in bets on the Fed's easing scale in Thursday's US data report.

US retail sales in September exceeded expectations, while another data point showed an unexpected decline in initial jobless claims, further confirming the view that the US economy is far from entering a recession. This boosted the dollar and bond yields, but traders still see a 90% chance of a Fed rate cut in November.

Gold is one of the best performing commodities in 2024, with a year-to-date gain of over 30%. The optimistic sentiment of rate cuts driven by the Fed's easing cycle has fueled the recent uptrend. Strong buying interest from central banks has also been a long-term support for gold prices.

Western investors have also helped drive the rise in gold prices, while in the first half of this year, Western investors mainly remained on the sidelines due to surging Asian demand. The Fed's shift to an accommodative monetary policy has enhanced the attractiveness of gold-backed Exchange Traded Funds (ETFs), with expectations of a fifth consecutive month of increase in holdings in October, marking the longest streak of inflows since 2020.

For many industry insiders, the future outlook is even more optimistic.

BMI analysts state that due to the support of Fed rate cuts and heightened geopolitical tensions, they expect gold prices to fluctuate between $2500 to $2800 in the coming months.

Traders, refiners, and miners attending the London Bullion Market Association annual conference this week believe that based on the average forecast from delegates, gold prices are expected to rise to around $2917 per ounce by the end of October 2025.

Fxstreet analysts mention that from a technical perspective, following a breakthrough of $2670-2672 this week, a sustained breach of the $2700 key level will become the new trigger point for bullish traders. Coupled with the oscillators on the daily chart remaining in the positive area without entering the overbought zone, this indicates minimal resistance for gold price advances.

On the other hand, any meaningful corrective decline now seems to find adequate support around the $2662-2660 level, followed by the $2647-2646 level. Breaking through the latter may trigger some technical selling pressure, dragging the gold price down to the intermediate support level of $2630, and then further down to around $2600. Currently, the latter should serve as a solid base for the gold price and a key pivot for short-term traders.