Gold prices remained stable on Monday as traders prepared for two major events that could affect the market: the U.S. presidential election and the Federal Reserve’s interest rate decision later in the week.
Spot gold is currently stable at $2,736.16 an ounce as it continues to attract safe haven interest.
With voting expected to begin on Tuesday US time, analysts suggest a Trump victory could send gold prices higher towards US$2,900 – his economic approach seen as more likely to spur inflation . Conversely, a Harris victory could trigger a temporary decline in the value of gold as markets adjust to expectations of political stability.
The Fed’s expected 0.25% rate cut on Thursday (largely already priced in) could play a role in shaping gold’s direction. Yields would likely decline in response to a drawdown, increasing gold’s attractiveness as a store of value compared to fixed-income investments.
Meanwhile, the US dollar weakened, hitting a two-week low and making gold cheaper for international buyers.
The dollar index fell 0.43% to 103.83, while Treasury yields also fell.