Gold prices climbed in Asian trading on Tuesday, hovering near record highs around $4,000 an ounce, as investors flocked to the precious metal amid escalating political uncertainty across the U.S., Japan, and France.
Expectations for further U.S. interest rate cuts continued to support the metals market, with traders closely watching a series of upcoming Federal Reserve speeches for policy clues. Additional momentum came from People’s Bank of China (PBOC) data showing another month of increased gold purchases.
Spot gold rose 0.4% to $3,974.57 per ounce, after touching an intraday peak of $3,977.45, while December gold futures gained 0.6% to $3,998.12, having briefly hit $4,000.05 earlier in the session.
Political instability drives demand for gold
The global wave of political tensions has spurred renewed interest in safe-haven assets. In the U.S., a prolonged government shutdown and ongoing congressional gridlock have deepened concerns about fiscal governance.
In France, political turmoil intensified following the resignation of Prime Minister Sébastien Lecornu, who was immediately reappointed by President Emmanuel Macron to help negotiate a path forward. Calls for a snap parliamentary election are growing, with both far-right and far-left parties pushing for a leadership change.
Meanwhile, Japan made history as Sanae Takaichi, a noted fiscal dove, was elected leader of the Liberal Democratic Party, setting her on course to become the country’s first female prime minister. Although Japanese equities initially rallied on the news, the yen weakened sharply and bond prices fell, as investors questioned how Takaichi plans to fund her stimulus-heavy and tax-cutting agenda.
The combination of these developments kept investors anchored to gold, reinforcing its position as a hedge against geopolitical and financial instability.
Precious and industrial metals extend gains
Other precious metals also strengthened after recent rallies to multi-year highs. Spot platinum added 0.5% to $1,632.51 per ounce, while spot silver edged 0.1% higher to $48.56 per ounce.
Among industrial metals, benchmark copper futures on the London Metal Exchange advanced 0.7% to $10,724.65 a ton, and COMEX copper futures climbed 0.8% to $5.0820 per pound. Copper prices were buoyed by continued uncertainty over production at Freeport-McMoRan’s Grasberg mine in Indonesia, one of the world’s largest copper operations, which remains idle following a fatal accident in early September.
China extends gold buying streak
According to official data released Tuesday, the People’s Bank of China expanded its gold reserves in September for the 11th consecutive month. The central bank’s holdings reached 74.06 million fine troy ounces, up from 74.02 million the previous month. The total value of its reserves also rose sharply amid surging bullion prices.
China’s sustained gold accumulation reflects its effort to diversify foreign exchange reserves away from the U.S. dollar and Treasury securities, particularly as tensions with Washington continue to strain bilateral relations.
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