Gold dips as stocks, dollar firm ahead of U.S. election outcome
* Markets await U.S. Fed meeting later this week
* SPDR Gold holdings fall for second session on Monday
* Platinum hits more than 4-month peak
* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl
By Swati Verma
BENGALURU, Nov 6 (Reuters) - Gold fell on Tuesday as U.S.
equities and the dollar firmed ahead of the outcome of
congressional elections in the United States, denting the
precious metal's appeal.
Spot gold fell 0.4 percent to $1,226.46 per ounce as
of 2:26 p.m. EST (1926 GMT), while U.S. gold futures
settled down $6, or 0.49 percent, to $1,226.30.
"It seems that the equity markets are doing pretty well
ahead of the results of the elections. Unless we see any
surprises in the elections gold will continue to stay range
bound between $1,215 and $1,235," said Walter Pehowich,
executive vice president of investment services at Dillon Gage
U.S. stocks rose and the dollar firmed, but the moves were
limited by investor caution about the elections.
The midterm congressional vote marks the first major test of
U.S. President Donald Trump's sweeping tax cuts and hostile
trade policies. Polls point to his Republican party losing
control of the House of Representatives which could curb some of
his policymaking power.
"These elections could be important for gold if they slow
the strength of the U.S. dollar, which has been a major headwind
to gold this year, or stoke uncertainty among U.S. retail
investors in gold should Trump lose support," Standard Chartered
analysts said in a note.
"We maintain a positive view towards gold, and believe
prices are likely to extend their gains towards $1,300 per
ounce, especially if the U.S. dollar weakens after the U.S.
Market participants also waited for a two-day Federal
Reserve meeting starting on Wednesday to gauge the outlook for
U.S. monetary policy, analysts said.
While the Fed is expected to keep interest rates steady,
markets will look for insight into the central bank's view on
future interest rate increases. Higher rates discourage the
buying of non-interest-paying bullion, which is priced in
"People are adjusting portfolios for the Fed meeting, that
is what is in most investors' minds right now," said Michael
Matousek, head trader at U.S. Global Investors.
"Going into the next couple of days gold trading should be
pretty light, so we'll move around a bit. Nobody wants to hold
big positions or make big changes before the Fed meeting."
Indicating investor sentiment toward gold, holdings of the
world's largest gold-backed exchange-traded fund, SPDR Gold
Trust, fell for the second straight session to 757.29
tonnes on Monday.
Silver fell 0.7 percent to $14.53 per ounce while
palladium declined 1.7 percent to $1,113.47.
Platinum gained 0.5 percent to $868.40 per ounce,
having touched its highest since June 25 at $875.70 earlier in
(Reporting by Swati Verma in Bengaluru
Editing by Susan Thomas and Bernadette Baum)
First Published: 2018-11-06 03:27:17
Updated 2018-11-06 21:48:07
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