Investing.com-- Gold prices hit a record high in Asian trade on Friday, benefiting from safe haven demand with just weeks left to a closely contested U.S. presidential election, while an interest rate cut by the European Central Bank also helped. 

Spot gold rose 0.4% to a record high of $2,705.26 an ounce, while gold futures expiring in December rose 0.5% to $2,720.15 an ounce.

The yellow metal firmed even as strong U.S. retail sales and labor market data furthered bets that U.S. interest rates will fall at a slower pace in the coming months. 

Gold buoyed by pre-election safe haven demand 

Bullion prices broke out of a tight trading range seen in the past two weeks, hitting new peaks as the U.S. election approached. 

Recent polls showed Vice President Kamala Harris and former president Donald Trump set for a tight presidential race, with less than three weeks left to the ballot. 

The disparity in the stances of both candidates spurred increased uncertainty over what the results of the election will entail.

While media polls showed Harris with a small lead over Trump, prediction and betting markets largely leaned towards a Trump victory, sparking more uncertainty over the potential outcome. 

Gold was also favored by safe haven demand as the Middle East conflict raged on. Traders were bracing for Israel’s retaliation against Iran over an early-October attack. 

Gold brushes off stronger dollar

The yellow metal firmed despite pressure from a stronger dollar, as the greenback hit an over 2-½ month high this week. 

The dollar was boosted chiefly by stronger-than-expected retail sales data, and another print showing weekly jobless claims fell, pointing to strength in the labor market. 

The readings furthered the notion that the Federal Reserve will cut interest rates by a smaller margin in the coming months.

But a 25 basis point cut by the ECB indicated that major global central banks were still set to cut rates further, with a lower rate environment likely to support gold and other non-yielding assets. 

“The precious metal found support from the ECB rate cut, which reminded the market that most central banks have gone into easing mode. This helped it shrug off economic data, which could slow the Fed’s rate cutting cycle,” ANZ analysts wrote in a note, adding that haven demand for gold also remained in play. 

Other precious metals were mixed. Platinum futures steadied at $1,005.95 an ounce, while silver futures rose 1% to $32.095 an ounce.

Among industrial metals, copper prices steadied on Friday but were headed for a third week of losses, as recent stimulus measures from top copper importer China largely underwhelmed.