Gold prices edged higher in Asian trading on Tuesday, holding near record levels close to $4,000 per ounce. The precious metal continued to attract safe-haven demand as political uncertainty deepened in the U.S., Japan, and France.
Expectations of further U.S. interest rate cuts also supported gold, while traders looked ahead to comments from several Federal Reserve officials this week for more clarity on monetary policy. Fresh data showing continued gold purchases by the People’s Bank of China (PBOC) added to the bullish momentum.
Spot gold rose 0.4% to $3,974.57/oz, after touching an intraday high of $3,977.45/oz. Meanwhile, December gold futures climbed 0.6% to $3,998.12/oz by 05:02 GMT, briefly crossing the $4,000 mark earlier in the session.
Global political tensions lift safe-haven gold
Demand for gold surged as the U.S. government shutdown dragged on with no signs of resolution. The ongoing political gridlock in Washington kept investors cautious and pushed them toward safer assets.
In France, political instability worsened after Prime Minister Sébastien Lecornu unexpectedly resigned. President Emmanuel Macron has since tasked Lecornu with negotiating a new political path, though growing calls from both the far right and far left have raised the possibility of a snap parliamentary election.
In Japan, fiscal dove Sanae Takaichi was elected leader of the ruling Liberal Democratic Party, positioning her to become the country’s first female prime minister. Her win boosted Japanese stocks, but the yen weakened and bond prices fell, as investors questioned how she would fund her plans for large-scale stimulus and tax cuts.
The combination of political volatility across major economies kept investors focused on gold as a store of value.
Precious and industrial metals gain
Other precious metals followed gold higher. Spot platinum rose 0.5% to $1,632.51/oz, while spot silver inched up 0.1% to $48.56/oz.
Among industrial metals, copper prices advanced as well. London Metal Exchange copper futures rose 0.7% to $10,724.65 per ton, and COMEX copper climbed 0.8% to $5.0820 per pound.
Gains came after Freeport-McMoRan (NYSE: FCX) gave no update on when output would resume at Indonesia’s Grasberg copper mine, one of the world’s largest, following a fatal accident in early September.
China continues gold buying streak
China’s central bank extended its gold-buying spree into an eleventh consecutive month in September, according to official data.
The PBOC increased its holdings to 74.06 million fine troy ounces, up from 74.02 million in August. The value of these holdings rose significantly amid the rally in global gold prices.
Analysts say this steady accumulation reflects China’s efforts to diversify reserves away from the U.S. dollar and Treasuries, especially as tensions with Washington remain elevated.
