Analysts say the US presidential election, which will take place on November 5, is a political risk that will positively impact the gold market. Whether Donald Trump or Kamala Harris wins, it will not help the US improve its public debt problem of more than 35,000 billion USD.

Mr Heng Koon How, Head of Market Strategy, Global Economics and Markets Research, UOB Bank, is concerned that the risk of political instability will increase if Mr Trump wins and becomes US president for the second time.

According to pre-election polls, Mr. Trump is winning against the remaining candidate, Ms. Harris.

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Political risk factors help gold prices increase. Photo: HH

Over the past few months, political risks in the Middle East have also been one of the important factors that have helped gold prices increase sharply. Currently, gold prices are trading close to the threshold of 2,800 USD/ounce.

Analysts said that although the situation in the Middle East has calmed down, gold prices are still increasing strongly in the context of the market being strongly affected by the US election.

The US Bureau of Economic Analysis recently announced that the world's largest economy grew 2.8% in the third quarter, lower than the previous forecast of 3%. Economists said that this data did not change much the expectation of a 25 basis point interest rate cut at the US Federal Reserve's November meeting.

However, gold investors are still concerned that if the US releases some other positive economic data, it will push the Fed to keep interest rates unchanged at the current time. This is a huge disadvantage for the gold market.

However, this data could not cause gold to decrease in recent sessions, on the contrary, gold prices still recorded a strong increase.

Michael Brown, senior research strategist at Pepperstone, said the slowing US economy has led to a sell-off in stocks. Investors are pouring money into gold as a lifeline amid a mixed economic environment, including political risks.

In the current climate of so much geopolitical and economic uncertainty, Ryan McIntyre, managing partner at Sprott Inc, recommends that investors hold about 10% of their net worth in physical gold.

Investors should consider their gold position as part of their fixed income holdings as a hedge, he added.

Gold prices are headed toward $2,800 an ounce, up more than 35% since the start of the year. Despite the impressive rally in the precious metal, McIntyre believes the market still has unlimited upside potential.

According to Daniel Pavilonis, senior market strategist at RJO Futures, the risk factor from the upcoming US presidential election has investors choosing gold as a safe haven asset, helping the price of the precious metal reach the mark of $2,850/ounce.

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