Gold prices continued to climb during Asian trade on Tuesday, hovering near record highs as traders sought refuge in safe-haven assets amid growing uncertainty surrounding the upcoming U.S. presidential election. This surge in demand persisted despite a strong dollar, as market participants anticipated a tighter 2024 election outcome and potential geopolitical risks.

Election Uncertainty Drives Risk Aversion

With just two weeks until the 2024 presidential election, recent polls show a close contest between Donald Trump and Kamala Harris. The heightened political uncertainty, along with contrasting economic policies from both candidates, has led to a significant increase in risk aversion among traders. As a result, safe-haven assets like gold have seen renewed interest in recent sessions, a trend that’s expected to intensify as the election draws nearer.

Spot gold rose by 0.5%, reaching $2,734.38 an ounce, while gold futures also posted gains of 0.4%, rising to $2,748.40 an ounce. These figures are just below the record-breaking $2,740 an ounce that spot prices hit on Monday.

Geopolitical Tensions Amplify Safe Haven Appeal

In addition to election concerns, fears of escalating conflict in the Middle East have further bolstered demand for safe-haven investments. An attempted drone attack on Israeli Prime Minister Benjamin Netanyahu, along with Israel's continued offensive against Hamas and Hezbollah, has increased market jitters. There are also reports of potential Israeli military action against Iran, adding to the geopolitical uncertainty.

Despite the dollar climbing to a three-month high—usually a factor that dampens demand for commodities like gold—safe-haven sentiment has been strong enough to offset the dollar's gains. Traders continue to expect the Federal Reserve to slow down its pace of interest rate cuts, which has traditionally posed challenges for the precious metals market.

Precious Metals Gain Amid Dollar Strength

Other precious metals also experienced upward movement on Tuesday. Platinum futures edged up by 0.4%, trading at $1,019.60 an ounce, while silver futures advanced 0.7%, nearing a 12-year high that was reached earlier in the week.

Copper Sees Modest Recovery as Focus Turns to China

In the industrial metals space, copper prices staged a small recovery, buoyed by hopes of improving demand in China, the world’s largest importer. After weeks of losses due to underwhelming economic stimulus measures from China, copper prices rose 0.7% on the London Metal Exchange, trading at $9,638.50 per ton. December copper futures followed suit, gaining 0.8% to trade at $4.3943 a pound.

Despite the People’s Bank of China cutting interest rates slightly more than expected on Monday, copper prices fell, reflecting the market’s disappointment with China's overall economic support. However, investors are still hopeful that the upcoming National People’s Congress, set to meet later in October, will approve more significant fiscal spending aimed at stimulating growth.

As traders continue to navigate both political and economic uncertainties, gold and other precious metals are expected to remain in focus as go-to assets for safety and stability.