Gold rangebound as focus is fixed on US election and Fed meeting

Bengaluru — Gold traded in a narrow range on Tuesday as investors stayed away from taking big positions ahead of the US presidential election and the Federal Reserve policy meeting later this week.

Spot gold ticked 0.1% down to $2,733.39/oz by 2.25am GMT. Bullion hit a record high of $2,790.15 last week. US gold futures edged lower by 0.1% to $2,742.40.

Democratic candidate Kamala Harris and Republican candidate Donald Trump are nearly tied in opinion polls, leaving the outcome of the US presidential race uncertain and potentially unconfirmed for days after voting ends.

“Gold should move higher no matter who gets into the White House as neither candidate seems averse to not just maintaining away spending but actually adding on to it,” said Marex analyst Edward Meir.

Gold could fluctuate in the short term, but a $3,000 target by 2025 looked achievable, especially with ongoing government spending, Meir said.

The market’s attention will also be on the Fed’s interest rate decision due this Thursday, along with remarks from chair Jerome Powell and other officials.

According to the CME FedWatch tool, markets see a quarter-point cut this week, which would be the second US rate reduction of the year.

“With that fully priced in by markets, the largely expected move may potentially draw little reaction from gold prices, with focus to revolve around policymakers’ forward guidance instead,” said IG market strategist Yeap Jun Rong.

Bullion, which is considered a hedge against geopolitical uncertainties, tends to do well when interest rates are low.

In China, a major metals consumer, the standing committee of the National People's Congress is meeting from November 4-8, with widespread market anticipation for the approval of additional fiscal stimulus measures.

Spot silver was steady at $32.46/oz, platinum shed 0.1% to $982.50 and palladium was up by 0.2% to $1,076.50

Reuters