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Gold prices are on the rise, hitting $2,758 per ounce today amid ongoing political uncertainty in the US and conflicts in the Middle East. The upcoming presidential election in the US and the close poll results between the candidates are contributing to the uncertainty. The lack of any immediate prospects for a ceasefire in the Middle East is also boosting the appeal of gold as a safe-haven asset.

Despite the strength of the US dollar and rising Treasury yields, gold continues to climb, suggesting that the increase is driven by growing uncertainty rather than hopes for lower interest rates. With less than two weeks left until the election, there is no clear lead for either candidate. Kamala Harris is currently leading Donald Trump by 1.7 percentage points in the polls, according to FiveThirtyEight. This close race may lead to reduced bets on risky assets and increased demand for safe-haven assets like gold.

In the past two sessions, the SPDR Gold Trust and iShares Gold Trust have seen positive inflows of $580 million and $82 million, respectively. However, hedge funds on Wall Street are betting on a potential Trump victory, anticipating further dollar strengthening, tariffs, and trade wars, which could fuel inflation and lead to higher Treasury yields.

The International Monetary Fund highlights high uncertainty about the future, citing potential disruptions to global supply chains and hindered growth due to trade wars and tariffs. In the Middle East, efforts to push for a ceasefire have been met with challenges. Egypt proposed a temporary ceasefire in Gaza, but facing opposition from far-right ministers in Israel, progress towards a permanent ceasefire remains uncertain.

Israel has presented conditions to end its conflict with Lebanon, including the freedom to conduct military operations within Lebanese territory, a proposal that Lebanon is unlikely to accept due to sovereignty concerns. Amidst escalating tensions, there is skepticism about the possibility of a peaceful resolution, with growing support in Israel for resettling the Gaza Strip instead of seeking a ceasefire.

In conclusion, the hope for peace in the Middle East seems exaggerated, with the potential for further escalation overshadowing any prospects for calm. The ongoing political uncertainty in the US and conflicts in the Middle East continue to drive gold prices higher, reflecting the global economic landscape’s volatility.