Investing.com — Gold prices were in holding pattern Tuesday, ahead of a tight U.S. presidential election and a Federal Reserve meeting.
At 3:36 p.m. ET (20:36 GMT), was 0.2% higher to $2,741.69 an ounce, while expiring in December rose 0.2% to $2,751.05 an ounce.
The yellow metal was hit with some profit taking last week after data showed signs of resilience in the U.S. economy, denting bets on deeper interest rate cuts by the Fed.
Gold steady with presidential elections in focus
That said, spot gold prices remain close to a record high of $2,790.41 an ounce hit in October, as safe haven demand for the yellow metal remained in play.
Donald Trump and Kamala Harris are headed for a tight presidential election, recent polls showed, with focus chiefly on the seven battleground states that are likely to determine the course of the election.
Still, “we believe gold is likely to perform well regardless of the US election outcome, with near-term geopolitical risks remaining high. Gold has long been a safe haven asset during times of elevated geopolitical risk,” analyst at ING said, in a note
“We believe gold’s positive momentum will continue in the short to medium term. The macro backdrop will likely favourable for the precious metal as interest rates decline and foreign-reserve diversification continues amid geopolitical tensions, creating a perfect storm for gold.”
Fed meeting awaited for more rate cut cues
Gold and broader metal prices were pressured by some resilience in the dollar, as the greenback steadied from recent losses as focus also turned to a Federal Reserve meeting this week.
The Fed is widely expected to , a smaller cut than the 50 bps seen in September. But its outlook on future cuts will be closely watched, especially as recent data showed strength in the U.S. economy and sticky inflation.
data from Friday also showed some cooling in the labor market – a trend that gives the Fed more impetus to keep cutting rates.
Lower rates bode well for metal markets, given that they reduce the opportunity cost of investing in non-yielding assets.
Among other precious metals, rose 1.6% to $1,005.95 an ounce, while were up 0.3% to $32.718 an ounce.
Among industrial metals, benchmark on the London Metal Exchange rose 0.6% to $9,737.00 a ton, while December rose 0.6% to $9,737.00 a pound.
The red metal was buoyed by anticipation of more cues on stimulus in top copper importer China, as the National People’s Committee kicked off a four-day meeting on Monday (NASDAQ:).
The NPC is widely expected to outline plans for increased fiscal stimulus.
(Ambar Warrick contributed to this article.)