Gold on even keel as market awaits US election outcome

Bengaluru — Gold held steady on Wednesday as investors keenly awaited the outcome of a tightly contested US presidential race.

Spot gold held its ground at $2,745.42/oz, as of 2.18am GMT. Bullion hit a record high of $2,790.15/oz last Thursday.

US gold futures edged 0.2% higher to $2,754.10/oz.

Critical battleground states are unlikely to be called for hours or even days in the US election.

It’s 95% about the US election this week, with a 5% splash of the Federal Reserve to add a touch of spice, said Kyle Rodda, financial market analyst at Capital.com.

“Gold is a part of the Trump trade and in the long term ought to benefit from a Trump victory, mostly due to the impacts of huge deficit spending but also because of potentially more uncertain US foreign policy,” said Rodda.

Traders are also awaiting the Fed’s two-day policy meeting, which concludes on Thursday, and chair Jerome Powell's remarks for further direction.

Markets broadly expect the Fed to announce a quarter-point rate cut this week after the September reduction.

“While markets expect a 25 bps cut this week, the Fed may avoid a dovish tone due to the inflationary impact of Trump's policies,” said Matt Simpson, senior analyst at City Index.

Gold is considered a hedge against geopolitical and economic uncertainties and tends to thrive in a low-interest-rate environment.

US trade deficit surged to the highest in nearly two-and-a-half years in September, data released on Tuesday showed.

Elsewhere, Perth Mint reported a decline in October gold sales, while silver sales slipped to their lowest in four months.

Spot silver fell 0.53% to $32.49/oz, platinum shed 0.6% to $993.45/oz and palladium was down 2.17% to $1,052.25/oz. 

Reuters