Gold prices remained stable on Tuesday as investors took a cautious approach in light of the upcoming U.S. presidential election and the Federal Reserve’s policy meeting later this week.
As of 07:38 GMT, spot gold was trading at $2,738.10 per ounce, maintaining its position after reaching a record high of $2,790.15 last week. U.S. gold futures also showed stability at $2,747.10.
The electoral race between Democratic candidate Kamala Harris and Republican candidate Donald Trump is exceedingly close, with opinion polls indicating a nearly tied contest. This uncertainty surrounding the election outcome could lead to delays in confirmation for several days after voting concludes.
Edward Meir, an analyst at Marex, commented on the implications for gold, stating, “Gold should move higher no matter who gets into the White House, as neither candidate seems opposed to maintaining or even increasing government spending.” He further suggested that while gold prices may experience short-term fluctuations, a target of $3,000 per ounce by 2025 is feasible, particularly given the ongoing fiscal policies.
Market participants are also focused on the Federal Reserve’s interest rate decision set for Thursday, alongside commentary from Chair Jerome Powell and other officials. The CME FedWatch tool indicates that traders expect a quarter-point rate cut, which would mark the second reduction of the year. Yeap Jun Rong, a market strategist at IG, noted that since this move is largely anticipated, it may result in minimal reaction from gold prices, shifting the focus toward policymakers’ future guidance.
Gold typically performs well in low-interest-rate environments and is viewed as a hedge against geopolitical uncertainties.
In China, the Standing Committee of the National People’s Congress is convening from November 4-8, and there is widespread market anticipation for the approval of additional fiscal stimulus measures, which could further influence gold prices.
On the metals market, silver saw a slight increase of 0.3%, reaching $32.54 per ounce. Platinum rose by 0.4% to $987.35, while palladium climbed nearly 1% to $1,084.71.
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