On Friday (October 18th), during the Asian market session, spot gold prices suddenly surged significantly, with the price of gold just breaking through $2,710 per ounce, currently reaching a high of $2,711.36 per ounce, setting a new historical record.

The gold price first broke through the $2,700 per ounce mark due to concerns about an escalation of conflicts in the Middle East, prompting investors to flock to safe-haven assets. Previously, Israel claimed to have killed Hamas leader Yahya Sinwar, who orchestrated Hamas' attacks on southern Israel, triggering a year-long Gaza war.

Israeli Prime Minister Benjamin Netanyahu stated that Israel will continue to fight until all the hostages taken by Hamas last year are freed. During periods of geopolitical and economic uncertainty, investors typically seek safety in gold.

Safe-haven demand overshadowed the macro headwinds that would usually put pressure on gold. On Thursday, U.S. data released weakened bets on the scale of Federal Reserve easing this year.

U.S. retail sales in September increased more than expected, and another report showed an unexpected decline in the number of initial jobless claims, reinforcing the view that the U.S. economy is far from entering a recession. An environment of rising interest rates usually puts pressure on gold, which does not generate returns.

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Data released by the U.S. Department of Commerce on Thursday showed that retail sales in September increased by 0.4% month-on-month, higher than the 0.1% increase in August. Economists surveyed by Reuters had previously forecast a 0.3% rise in retail sales.

Furthermore, the number of initial jobless claims in the U.S. unexpectedly declined last week. According to data released by the U.S. Department of Labor on Thursday, for the week ending October 12th, the number of initial jobless claims decreased by 19,000, falling to 241,000. The median forecast of surveyed economists was 259,000.

Gold prices have risen by more than 30% so far this year, making it one of the strongest-performing commodities in 2024. The optimism surrounding rate cuts, following the Federal Reserve's initiation of an easing cycle last month, has driven recent gains. Strong central bank buying has also been a long-term pillar supporting gold prices.

Western investors have also helped to push up gold prices. In the first half of this year, as Asian demand soared, Western investors largely remained on the sidelines. The Federal Reserve's shift towards a more accommodative monetary policy has boosted the attractiveness of gold-backed exchange-traded funds (ETFs), with these funds' gold holdings on track to expand for a fifth consecutive month in October—the longest-duration inflow of funds since 2020.

Representatives attending the annual gathering of the London Bullion Market Association (LBMA) predict that gold prices will rise to $2,941 per ounce over the next 12 months.Ole Hansen, Head of Commodity Strategy at Saxo Bank, said: "Earlier this week, a survey released by the LBMA showed that the basic expectation for gold prices is to rise to around $3,000 per ounce next year."