New Delhi: Amid electoral uncertainties, as the US votes next week to elect the 47th President, its economy is shining. Gold prices reached an all-time high level on Tuesday, ahead of an expected interest rate cut by the US Federal Reserve in November, the media reported.
Spot gold was up 0.3 percent to USD 2,748.64 per ounce as of 1031 GMT, just shy of a record high of USD 2,758.37 it hit last Wednesday. US gold futures gained 0.2 percent to USD 2,760.80.
“Gold bulls appear to be taking advantage of the recent pause in the US dollar’s and yields ascent, while still enjoying the tailwinds from Fed rate cut expectations and US election risks,” Han Tan, chief market analyst at Exinity Group, was quoted as saying.
“Gold should retain its upward bias and may even flirt with the USD 2,800 level in the days ahead, as long as US election risks continue weighing on market sentiment while Fed rate cut expectations remain intact.”
In the run-up to the polls, the American economy was boosted because of robust consumer spending. It stayed resilient despite 5.25 percentage points in 2022 and from the Federal Reserve actions in 2022 and 2023 to tame inflation.
The US economy sustained with solid pace in the third quarter as subsiding inflation and strong wage gains powered consumer spending ahead of the contentious presidential election set to turn on pocketbook issues, the media reported.
The Commerce Department’s advance estimate of third-quarter gross domestic product on Wednesday will be published less than a week before the November 5 election between Democratic Party candidate and Vice President Kamala Harris, and former President Donald Trump. Surveys show the race is toss–up.
Americans, who list the economy as a top election issue, have chafed at high food and housing costs, even as the economy has defied forecasts of a recession and continues to outperform its global peers.
Its GDP is likely to increase 3.0 percent annualized rate in the July-September period, matching the April-June quarter’s pace, the media reported, adding estimates ranging from 2.0 percent to 3.5 percent.
The pace of growth would still be well above what US Fed officials regard as the non-inflationary growth rate of around 1.8 percent. It would add to annual revisions published in September, indicating that the economy was much stronger than previously estimated.
Consumer spending, which accounts for more than two-thirds of economic activity, is estimated to have grown at a rate of at least 3.5 percent, up from the 2.8 percent notched in the second quarter.
Business spending, especially on aircraft, also contributed to GDP growth. Firms likely boosted investment in technology, mostly in artificial intelligence (AI). Government spending may also have added to growth.
(Shubham)