Due to the further escalation of the situation in the Middle East and the still deadlocked US election race, investors flocked to safe-haven assets, with gold prices continuing to hit new historical highs.

In the early morning trading today, spot gold broke through the $2,700 mark, reaching a high of $2,713.93 per ounce.

As of the time of writing, the gold price has retreated to a gain of 0.51%, at $2,706.6 per ounce, having accumulated an increase of about 30% so far this year.

Why has gold surged so much?

The escalation of geopolitical tensions and election risks have jointly driven the market's risk aversion sentiment.

According to China News Service, Israel announced on the 17th that the political bureau leader of the Palestinian Islamic Resistance Movement (Hamas), Yahya Sinwar, has died in Gaza. Hezbollah in Lebanon said on the 17th that its confrontation with Israel has entered a "new escalation phase."

Prime Minister Netanyahu released a video statement on social media, stating that Sinwar's death would not end the conflict in Gaza, but it was the "beginning" of the end of the conflict in Gaza, "as long as Hamas lays down its weapons and returns the hostages, the war can end."

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At the same time, with only three weeks left until the US election day on November 5th, investors have begun to reprice the election risks.

OCBC foreign exchange strategist Christopher Wong said:

"Traditional polls and dispersed betting polls have shown a clear divergence, even as we get closer to the election.""In light of the instability of the election development and the uncertainty of geopolitics, the hedge against Trump's election—long gold—may still be sought after."

However, at present, Trump's advantage in key swing states has expanded, and the expectation of his election has suddenly heated up.

Another factor driving up gold prices is the sign that the dollar may be due for a correction.

Christopher Wong stated that, from a technical perspective, the dollar's rebound is somewhat weak, "and the possibility of a correction in the near term should not be ruled out."

Furthermore, the US retail sales data for September, released overnight, exceeded expectations, suppressing the expectation of easing, and further driving up the sentiment of risk aversion.

From a broader perspective, as the Federal Reserve initiated rate cuts last month, the optimism of rate cuts has driven the recent rise, and strong buying from global central banks is also a long-term support for gold prices.

According to the survey data of the representatives at this week's London Bullion Market Association Annual Meeting, it is expected that by late October 2025, the price of gold will rise to around $2,917 per ounce.

Bank of America: Gold may replace US Treasury bonds as the safest "safe haven," with a potential rise to $3,000.

Michael Widmer, a commodity strategist at Bank of America, recently released a research report stating that, considering the dilemma faced by the US debt problem, gold may be more attractive.

Widmer said that no matter who is elected between Trump and Harris, the US will face the prospect of expanding deficits.According to data from the Committee for a Responsible Federal Budget, an oversight body, Trump's tax plan would require an additional $7.5 trillion in new debt, while Harris's fiscal plan would demand an increase in debt by $3.5 trillion.

Moreover, according to Widmer, as countries adapt to and address climate change, global fiscal spending commitments are likely to increase, and demographic structures are expected to become more challenging, which could also lead to increased defense spending.

Therefore, Widmer believes that gold has the potential to rise further to $3,000 per ounce in the future:

"Due to investor concerns that increased U.S. funding needs could impact the U.S. Treasury market, gold may become the ultimate safe-haven asset in people's minds."