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Gold prices maintained stability on Monday, as market participants anticipated a pivotal week featuring the U.S. presidential election and a possible rate cut from the Federal Reserve.
Spot gold edged up by 0.1% to $2,738.29 per ounce, staying close to last Thursday’s record of $2,790.15. U.S. gold futures held steady at $2,747.50, reflecting caution among traders ahead of major economic events.
See: Gold (XAU/USD) is in a strong uptrend, reaching near 2738.56 with bullish momentum supported by a rising MACD, indicating sustained upward movement on the VT Markets app.
The outcome of the U.S. presidential election, with Democratic candidate Kamala Harris and Republican incumbent Donald Trump neck-and-neck in opinion polls, could strongly impact gold’s movement.
Historically, gold prices often rise during political uncertainty, as the metal is perceived as a stable store of value. With the election outcome unclear, market participants are expected to seek refuge in gold, anticipating a volatile response from equity markets.
This week, traders will also closely monitor the Federal Reserve’s rate decision. Current market pricing shows a 98% likelihood of a quarter-basis-point cut, as indicated by the CME FedWatch tool.
In a low-interest-rate environment, gold often sees increased demand since it becomes more competitive against yield-bearing assets.
Statements from Fed Chair Powell and other officials could further clarify the Fed’s policy outlook, influencing gold’s appeal as an investment.
See also: How to Manage Market Volatility in the US Elections
Friday’s U.S. jobs report revealed nearly stagnant employment growth in October, with disruptions from aerospace strikes and weather conditions curbing manufacturing jobs and payroll data.
This labour data reinforces expectations for additional Fed rate cuts, which would lower borrowing costs and further boost gold’s safe-haven allure.
On the physical side, gold demand in India rose last week due to festival buying, though volumes remained subdued due to high prices. Meanwhile, SPDR Gold Trust, the largest gold-backed ETF, reported a 0.35% dip in holdings to 888.63 tonnes, hinting at some profit-taking among institutional investors.
In other precious metals, spot silver rose 0.4% to $32.54 per ounce, platinum edged down by 0.1% to $991.72, and palladium rose nearly 1% to $1,108.36. These metals, though generally influenced by economic indicators, may also experience heightened volatility as traders evaluate election and Fed developments.
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