Gold prices reached a record high in Asian trading on Friday, driven by ongoing speculation that the Federal Reserve will cut interest rates soon. Additionally, heightened demand for safe-haven assets amid a tight U.S. presidential election contributed to the surge.

The price of gold surged on Thursday and Friday, mirroring declines in the dollar and Treasury yields as investors continued to bet on an interest rate cut, despite some recent stronger inflation data. Weakness in the labor market also supported this view.

Spot gold increased by 0.3% to $2,566.59 per ounce, while December gold futures rose by 0.6% to $2,594.70 per ounce by 23:47 ET (03:47 GMT). Earlier in the session, spot gold had reached a record high of $2,570.06, and gold futures approached $2,600.

Gold prices were lifted by speculation that the Federal Reserve will cut rates in its upcoming meeting. Investors are convinced that a rate cut is imminent, though there is uncertainty about the extent of the reduction.

Recent strong inflation data led to expectations for a smaller, 25 basis point cut, while softer jobless claims data released on Thursday revived speculation for a 50 basis point cut. Current trading suggests a 58% probability of a 25 basis point cut and a 42% chance of a 50 basis point cut, according to CME Fedwatch. Despite this uncertainty, analysts anticipate that next week’s Fed meeting will signal the start of a rate-cutting cycle, with expectations for a total reduction of at least 100 basis points by the end of the year. There are two remaining Fed meetings after September.

Lower interest rates are favorable for gold and other precious metals because they reduce the opportunity cost of holding non-yielding assets.

Other precious metals also saw gains, though they trailed behind gold. Platinum futures increased by 0.6% to $989.80 per ounce, while silver futures rose by 0.6% to $30.280 per ounce.

Industrial metals benefited from the expectation of lower rates, which generally signal increased economic activity. Copper prices were further supported by anticipation of additional stimulus measures from China, the leading importer of copper.

Benchmark copper futures on the London Metal Exchange climbed 0.7% to $9,280.00 per ton, and one-month copper futures rose 0.4% to $4.2260 per pound. Weak economic data from China fueled speculation that Beijing will introduce more stimulus to support growth, with Citi analysts predicting “incremental” stimulus measures for the remainder of the year.