NEW YORK: Gold prices ticked up on Tuesday as a decline in oil prices slightly eased inflation concerns, while investors awaited the outcome of US midterm elections for fiscal policy clues.
Spot gold rose 0.2 percent to USD3,953.37 per ounce by 9:07 a.m. ET (1407 GMT), rebounding from a 1 percent decline earlier in the session that took prices to a low of USD3,893.31. US gold futures for December delivery fell 0.2 percent to USD3,963.50 per ounce.
Oil prices fell about 2 percent on Tuesday after President Donald Trump said the US would end billions of dollars of annual military support to Israel. The recent reports triggered a sharp drop in oil prices, helping lift precious metals, said Phillip Streible, chief market strategist at Blue Line Futures. Traders saw a 73 percent probability of a December Federal Reserve rate increase, compared with 76 percent earlier in the day, CME’s FedWatch Tool showed.
A slight pullback in rate hike expectations lent support to gold by improving the appeal of non-yielding assets.
Attention is focused on Tuesday’s US midterm elections, with polls and non-partisan analysts favouring Democrats to wrest control of the House from Republicans, while control of the Senate remains uncertain.
“A Democratic clean sweep could potentially put pressure on the US dollar by making it harder for the administration to pass law, including measures related to the debt ceiling. If the dollar falls, that’s one way gold could potentially find some support,” said Fawad Razaqzada, market analyst at Forex.com. Meanwhile, the World Gold Council cut its forecast for growth in gold investment this year to 200 metric tons from 400 tons estimated previously, citing weaker appetite for bars and coins. It, however, raised its estimate for central bank purchases.
Among other metals, spot silver slipped 0.92 percent to USD50.16 per ounce, platinum fell 0.82 percent to USD1,437.31 and palladium dropped 2.62 percent to USD943.57.
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