(Reuters) – Gold prices rose on Thursday, hovering near a record high scaled in the previous session, as rising anticipation of a US interest rate cut in September lifted demand for non-yielding bullion.
Spot gold was up 0.5% at $2,470.62 per ounce, as of 0641 GMT. Prices hit an all-time high of $2,483.60 on Wednesday. US gold futures also climbed 0.5% to $2,473.10.
Decreasing interest rates and US elections are two immediate factors likely to push gold beyond $2,500, as gold tends to benefit from economic and geopolitical uncertainty, said Ryan McIntyre, senior portfolio manager at Sprott Asset Management.
Lower rates increase the appeal of non-yielding bullion.
Fed Governor Christopher Waller and New York Fed President John Williams both noted the shortening horizon toward looser monetary policy. Separately, Richmond Fed President Thomas Barkin said he is "very encouraged" on broadening declines in inflation.
Markets expect a 25-basis-point reduction at the Federal Reserve's September meeting, according to CME's FedWatch Tool.
"A (Donald) Trump presidency could ultimately be negative for investor demand (in gold). His policies of tax cuts and more tariffs could ultimately reverse the recent falls in inflation," ANZ said in a note.
According to the World Gold Council, global physically backed gold exchange-traded funds saw the second consecutive month of inflows in June.
There could be a new wave of demand for gold coming through ETFs, particularly with financial advisers and institutions," McIntyre said.
Over the next 6-12 months, Citi expects gold rising to $2,700-$3,000 per ounce and silver to $38 per ounce.
Investors may want to hedge their equity and currency exposures as potential global trade war looms, especially between the US and China, which could boost precious metals, it added.
Spot silver rose 0.6% to $30.49 per ounce, platinum firmed 0.4% at $998.50 and palladium gained 0.8% to $959.56.