By Daksh Grover
(Reuters) – Gold prices were largely flat on Wednesday as investors keenly awaited the outcome of a tightly-contested U.S. presidential race.
Spot gold slipped 0.1% to $2,740.28 per ounce, as of 0545 GMT. Bullion hit a record high of $2,790.15 last Thursday.
U.S. gold futures were little changed at $2,749.00.
Republican Donald Trump defeated Democrat Kamala Harris in the key battleground states of North Carolina and Georgia in Tuesday’s U.S. election, according to projections by Edison Research, bringing him closer to an unexpected political comeback.
It’s 95% about the U.S. election this week, with a 5% splash of the Federal Reserve to add a touch of spice, said Kyle Rodda, financial market analyst at Capital.com.
“Gold is a part of the Trump trade and in the long term ought to benefit from a Trump victory, mostly due to the impacts of huge deficit spending but also because of potentially more uncertain U.S. foreign policy,” said Rodda.
Traders are also awaiting the Fed’s two-day policy meeting, which concludes on Thursday, and Chair Jerome Powell’s remarks for further directions on interest rates.
Markets broadly expect the Fed to announce a quarter-point rate cut this week after the bumper 50 bps reduction in September.
“While markets expect a 25-bp cut this week, the Fed may avoid a dovish tone due to the inflationary impact of Trump’s policies,” said Matt Simpson, senior analyst at City Index.
Gold is considered a hedge against geopolitical and economic uncertainties and tends to thrive in a low interest rate environment.
U.S. trade deficit surged to the highest in nearly 2-1/2-years in September, data released on Tuesday showed.
Elsewhere, Perth Mint reported a decline in October gold sales, while silver sales slipped to their lowest in four months.
Spot silver fell 1.4% to $32.19 per ounce, platinum shed 1.2% to $988.00 and palladium was down 2.4% to $1,049.48.
(Reporting by Daksh Grover in Bengaluru; Editing by Sumana Nandy, Subhranshu Sahu and Varun H K)
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