Monday, 5 November 2018

Gold prices hold steady ahead of U.S. elections

Gold prices held steady on Monday as investors were cautious ahead of the U.S. congressional elections due on Tuesday which will determine whether the Republican or Democratic Party controls Congress.

Spot gold was steady at $1,232.08 per ounce, as of 0415 GMT, while U.S. gold futures were flat at $1,233.4 per ounce.

"Traders don't want to extend any risk because of the growing uncertainty around the elections," said Stephen Innes, APAC trading head at OANDA in Singapore.

Opinion polls show strong chances that the Democratic Party may win control of the House of Representatives in the Nov. 6 midterm elections after two years of wielding no practical political power in Washington, with Republicans likely to keep the Senate.

"We are seeing increasing weariness that the U.S. dollar could run out of steam, which naturally plays into gold... If we get a little bit of escalation of U.S. political risk that plays even more favourably into gold," Innes added.

Meanwhile, the dollar lost ground against most of its major peers, as growing expectations of an orderly Brexit bolstered the pound, euro and broader global investor sentiment.

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