NEW YORK: Gold prices were little changed on Monday as investor caution prevailed ahead of the US presidential election and looming Federal Reserve decision on interest rates.
Spot gold held its ground to stand at $2,740.69 an ounce at 1237 GMT, having hit a record high of $2,790.15 last Thursday.
US gold futures were flat at $2,749.80. The US presidential election is on Tuesday, with opinion polls showing Democratic candidate Kamala Harris and Republican Donald Trump neck and neck.
“The driver for gold this week will be the US election. The Fed cut is unlikely to trigger much movement in my view, as the bank is likely to signal further cuts in line with market expectations,” said UBS analyst Giovanni Staunovo.
“We believe a Trump victory would bring the gold price closer to our $2,900 per ounce target more quickly, while a Harris win could see gold temporarily dropping.” The US central bank rate decision and Chair Jerome Powell’s remarks are due on Thursday. Traders give close to a 100% chance of a quarter-point rate cut, the CME FedWatch tool shows.
Bullion has gained 33% this year and hit multiple record peaks along the way. It is traditionally seen as a hedge against economical and political uncertainty and tends to do well when interest rates are low. The dollar index was down 0.6%, hitting a two-week low. A weaker US currency makes dollar-priced gold more appealing for buyers holding other currencies.
In top metals consumer China, the Standing Committee of the National People’s Congress meets over Nov. 4-8, with markets widely expecting the approval of more fiscal stimulus. Among other metals, spot silver rose 1.1% to $32.79 an ounce after touching a more than two-week low at $32.26. Platinum gained 0.7% to $997.41 while palladium firmed by 0.4% to $1,101.56.
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