LONDON (Reuters) - Gold is extending a period of successive record highs, moving the psychological milestone of $3,000 per ounce into view, analysts said, as geopolitical tension, a tight U.S. electoral race and favorable macro backdrop attract more investors.

Spot gold reached a historic high of $2,740.37 a troy ounce on Oct. 21 and is on track for its strongest annual performance since 2007, with a rise of over 31% so far in 2024. Bullion has already hit 33 record highs this year. [GOL/]

"The need for portfolio diversification has continued to drive investment inflows into gold, whether investors base their views on ever rising U.S. public debt in the long term, systemic risks in global financial markets or possible corrections in richly priced equities," consultancy Metals Focus said.    

Metals Focus expects gold to touch $2,800 before year-end and global rate cuts to continue supporting the non-yielding bullion until there is more certainty about the duration of the rate reduction cycle and its endpoint.

Against a backdrop of high gold prices, jewellery consumption suffered losses, mine production is on track to hit a record in 2024 and recycling is due to rise by 5%. Central banks remain net buyers of gold, but the pace of purchases has slowed down.    

The strength of gold's momentum has outweighed weaker physical demand and higher supply, analysts said.

"There is little doubt that many would-be investors balk at the prospect of paying record prices, but the fear of missing out on the continued rally ultimately forces many to get involved," said Ole Hansen, head of commodity strategy at Saxo Bank.

"The ability to forecast the next level is increasingly down to guesswork and the round numbers game, with the next major target for gold pointing to $3,000."    

Indicating new interest in buying gold, online marketplace BullionVault is seeing the strongest pace of new account openings since March 2022, when Russia's war with Ukraine started.

"Private investors continue taking profit at these record levels, but the pace of liquidation remains far from a rush, because investors aren't selling as fast as gold prices rise," said Adrian Ash, head of research at BullionVault.