Gold prices rose on Tuesday as investors braced for political tension after polls showed the two candidates for the US presidential elections, Republican Donald Trump and Democrat Kamala Harris, in a close race, and thus increasing the potential for dispute over the product.
The spot price of gold rose 0.2% to $2,740.96 an ounce by 01:54 PM EST (1852 GMT).
US gold futures also rose 0.1% to $2,749.70 in settlement, according to Reuters.
Gold is supported by “uncertainty about the election. Part of it is what happens if things don’t go smoothly, part of it is the possibility of tariffs, some kind of economic changes,” said Daniel Pavilonis, chief market strategist at RJO Futures.
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With former President Trump and Vice President Harris tied and Democrats and Republicans also competing for control of the US Congress, investors are particularly concerned about the outcome being unclear or controversial, especially if it provokes unrest.
“If the outcome of the election is uncertain for days or even weeks, gold will benefit from the resulting uncertainty,” Commerzbank said in a note.
Trump has repeatedly said that no loss “can come as a result of massive fraud.” The winner may not be known for days if margins in key states are as narrow as expected.
Exinity Group chief market analyst Han Tan said gold should eventually reach $2,800 “once things calm down” after the election.
Read also: Oil prices rise due to the decline of the dollar coinciding with the US presidential elections
In other context, markets are widely expecting a quarter-point cut in interest rates by the Federal Reserve on Thursday, which is the second cut in US interest rates this year after a big cut in September.
Gold is seen as a hedge against economic and political uncertainty, and a recovery in low-interest environments has helped it rise about 33% this year so far.
Spot silver rose 0.4% to $32.59 an ounce, platinum increased 1.5% to $998.35, and palladium fell 0.2% to $1,072.50.
A survey of the private sector in China, the largest consumer of metals, showed that services activity expanded at the fastest pace in three months in October.
2024-11-06 00:36:00
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