- Gold prices reached a record high in Asian trading on Friday, driven by ongoing speculation that the Federal Reserve may cut interest rates next week and supported by increased safe-haven demand amid a tense U.S. presidential election.

- The yellow metal surged on Thursday and Friday, tracking declines in the dollar and Treasury yields, while markets maintained expectations for a rate cut despite some stronger inflation data. Weakness in the labor market also reinforced this scenario.

- Spot gold rose by 0.5% to $2,571.03 per ounce, while December gold futures increased by 0.6% to $2,594.70 per ounce. Gold futures approached a peak of $2,600.

- The gains in the yellow metal came as investors remained convinced that the Federal Reserve will cut rates when it meets next week. Markets are divided on the scale of the potential rate cut. Strong inflation data released earlier this week shifted expectations towards a smaller reduction of 25 basis points.

- However, weak labor market data, particularly jobless claims, released on Thursday brought back expectations of a 50 basis point cut. Traders were seen pricing in a 58% chance for a 25 basis point cut and a 42% chance for a 50 basis point cut, according to CME Fedwatch.

- Analysts still expect next week’s meeting to mark the beginning of a rate-cutting cycle for the Fed, with expectations that the central bank will reduce rates by at least 100 basis points by the end of the year. After September, there are two more Fed meetings left in the year.

- Lower rates present a positive scenario for gold and other precious metals, as they reduce the opportunity cost of investing in non-yielding assets.

- In other precious metals, gains were also noted. Platinum futures rose by 0.6% to $989.80 per ounce, while silver futures increased by 0.6% to $30.280 per ounce.

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