Gold gains as caution sets in ahead of US election

Gold prices rose on Monday as investors remained nervous ahead of this week's US presidential election and as a surge in COVID-19 cases and renewed lockdowns in some countries increased uncertainty about the global economic outlook.

Spot gold rose 0.7% to $1,890.96 per ounce by 1213 GMT, while US gold futures were up 0.5% to $1,889.60.

"We're only seeing small gains (in gold) and that's not surprising. This is a massive event driven week, obviously with the elections," said OANDA analyst Craig Erlam, adding that gold could see some volatile price swings on election day.

"We're seeing a bit of consolidation in the moves after gold came under heavy pressure last week."

Gold prices fell about 1.2% last week.

Investors are prepared for short-term trading turmoil and major long-term policy shifts on the eve of the US election.

"(Gold) is stuck in a trading range, the dollar is a bit better than last week but still within a trading range for the past month or so," said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

"So as long as we don't see a break up or down in the dollar, don't think you're going to see anything exceptional on the precious side."

The dollar, often seen as a rival safe-haven to gold, remained steady against a basket of currencies.

Europe's total COVID-19 cases crossed the grim milestone of 10 million on Sunday, prompting countries to enact fresh lockdowns.

Silver jumped 1.7% to $24.03 an ounce, platinum gained 1% to $857.30, while palladium fell 0.4% to $2,202.56.