Gold Hits Record High Amid US Election Jitters

Gold soared to a new record as markets brace for the uncertainty surrounding the US presidential election and shifting expectations about the Federal Reserve's rate cuts. US Treasury yields hit a three-month high as investors anticipate that a Trump presidency could keep inflation and interest rates elevated. Meanwhile, Tokyo Metro shares surged in Japan's largest IPO in six years, while Hyundai Motor India's shares dropped following a lukewarm IPO debut.

Equities

The FTSE 100 fell 0.6% to a one-week low of 8,264.5 points, weighed down by declines in utilities and real estate stocks. The utilities sector dropped 1.5%, while real estate stocks fell 1.2%. Investors are holding back ahead of the UK budget announcement on 30 October, which could impact public borrowing and debt restructuring.

Among individual companies, Hunting Plc saw its shares slump 18% after cutting its annual profit forecast. In contrast, Morgan Sindall rose 14% to a record high after the construction firm raised its profit outlook for 2024, exceeding previous forecasts.

In the US, the major indices closed mixed. The Dow Jones slipped 0.02%, while the S&P 500 lost 0.05%. The Nasdaq, however, managed a modest gain of 0.18%.

Verizon shares fell 5.03% after the telecom giant missed revenue estimates for the third quarter, while 3M dropped 2.31% despite raising its profit forecast. GE Aerospace shares declined 9% as ongoing supply chain issues dragged down revenue, pulling the broader industrials sector lower by 1.19%.

Meanwhile, General Motors surged 9.81% after its third-quarter results beat expectations, providing a bright spot amid the otherwise cautious trading. Lockheed Martin, on the other hand, dipped 6.12% following its quarterly results.

Rate-sensitive homebuilding stocks also struggled, with the PHLX Housing Index down 3.05%, led by PulteGroup, which fell 7.24% despite reporting better-than-expected earnings. Microsoft climbed 2.08%, contributing to gains in the broader technology sector, which edged up 0.15% for the day.

Forex & Commodities

The US dollar climbed to a 2-1/2-month high as market expectations shift towards a slower pace of interest rate cuts, buoyed by strong economic data. The greenback is trading at 104.19, with US Treasury yields also rising, putting pressure on the yen, which dropped to 152 per dollar. Meanwhile, the British pound traded little changed at $1.29925 after hitting a low of $1.2945.

Gold surged to an all-time high, reaching $2,750.21 per ounce, driven by geopolitical tensions and US election uncertainties. The demand for safe-haven assets increased as investors speculated on inflationary policies from both US presidential candidates. Silver also remains supported by physical shortages, trading at $34.67 per ounce.

Oil prices continued to rise, with Brent crude futures settling at $76.04 per barrel, as traders downplayed the likelihood of a Middle East ceasefire and focused on improving demand prospects from China. US West Texas Intermediate crude climbed to $72.09 per barrel. Analysts expect global crude stockpiles to decline in the coming months, providing support for higher prices.