Gold has surged past the $2,400 per ounce mark, driven by increasing demand from investors seeking safe havens amidst rising political uncertainty in the United States. The recent announcement by President Joe Biden that he will not seek re-election has intensified market volatility. Biden’s decision to endorse Vice President Kamala Harris for the Democratic nomination has added to the political unpredictability, with former President Donald Trump emerging as a strong contender in the polls.

This political turbulence has led investors to turn to gold, traditionally considered a secure asset during times of instability. Additionally, the weakening US dollar has further bolstered gold prices. As markets opened on Monday, the dollar’s decline provided additional momentum for gold, as a weaker dollar typically enhances the metal’s appeal by making it cheaper for holders of other currencies.

The ongoing pre-election campaign in the US, coupled with recent events such as an assassination attempt on Trump in Pennsylvania, has created a climate of uncertainty. This has prompted investors to seek refuge in gold, driving its price to new highs.

Market analysts hold mixed views on the long-term impact of a potential Trump victory on gold prices. Some anticipate that Trump’s policies, which may include higher trade tariffs and increased US-China tensions, could strengthen the dollar and bond yields, traditionally inversely related to gold prices. However, expectations of looser fiscal policies under a Trump administration might counteract this effect, sustaining the demand for gold.

The recent performance of gold reflects heightened investor expectations that the Federal Reserve may shift towards monetary easing. Lower interest rates generally favour gold, as they reduce the opportunity cost of holding the non-yielding asset.