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BENGALURU (Nov. 5): Gold strengthened Thursday as investors cautiously optimistic that Democrat Joe Biden would overtake US President Donald Trump in a close race to the White House, increasing the likelihood of further stimulus. economical.
However, the chances of a policy stalemate in Washington amid a divided Congress limited bullion earnings, seen as a hedge against likely inflation caused by a large stimulus.
Spot gold was up 0.2% at $ 1,906.74 an ounce at 0338 GMT.
US gold futures rose 0.7% to $ 1,909.00 an ounce.
“Biden is likely to secure a presidential victory and this has increased confidence, as a democratic president can point to more stimulus,” said Margaret Yang, a strategist at DailyFx, which covers currency, commodity and index trading. Biden said Wednesday he was on his way to victory after claiming key Midwestern states of Wisconsin and Michigan.
But Trump moved to file lawsuits in states like Georgia and called for a vote recount in various battle states, pointing to a broad effort to challenge the results.
“Gold traders are not thrilled with this result,” DailyFx’s Yang said, noting that a contested result could mean a smaller fiscal stimulus plan.
Meanwhile, the dollar fell back from the strong gains of the previous session, making bullion cheaper for those who have other currencies.
Asian stocks also rose as markets bet stagnant US politics, a likely scenario amid the slim prospects of a Democratic-controlled Senate, would favor some industries.
“Markets are looking forward to a stimulus package and the certainty of an outcome, regardless of whether it is contested, has now reduced investors’ fears and driven them back into assets like gold and equities,” said Michael Langford, Director corporate advisory and consulting executive. Firm AirGuide.
Traders also expected a policy decision from the United States Federal Reserve (Fed) at 1900 GMT.
Silver was up 0.8% to $ 24.09. Platinum gained 0.2% to $ 871.17, while palladium fell 0.1% to $ 2,286.13.
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