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Gold price hits record high of $2700 amid geopolitical tensions, US election uncertainty

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Gold prices surged past the $2700 mark in early Asian trading on Monday, reaching an all-time high.

Investors flocked to the precious metal, seeking safe-haven assets amidst Middle East tensions and uncertainty surrounding the US presidential elections.

According to Alexander Zumpfe, precious metal trader at Heraeus Metals Germany, the escalation of conflict in the Middle East and concerns about the US election fueled the rally.

“Gold, a traditional safe-haven asset, attracts investors during uncertain times,” Zumpfe noted.

The US Federal Reserve’s easing monetary policy expectations and potential rate cuts also contributed to the price surge. With a 90 percent likelihood of another quarter-point rate cut in November, lower interest rates reduce the opportunity cost of holding non-yielding bullion, lifting gold prices.

However, potential drawbacks may impact gold prices. China’s slowing economy, with a 4.6 percent GDP expansion in Q3, below the government’s 5 percent target, may lead to decreased demand.

As the world’s largest gold consumer, China’s economic downturn could push prices down.

Gold’s historical role as a trusted store of value and safe-haven asset underpins its appeal.

It can be traded digitally using DACCs (smart, programmable digital assets) on blockchain platforms.

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