Gold prices steady

GOLD prices held steady yesterday as investors were cautious ahead of the US congressional elections today which will determine whether the Republican or Democratic Party controls Congress.

Spot gold was steady at $1,232.63 per ounce, as of 0644 GMT, while US gold futures were flat at $1,233.5 per ounce.

“Traders don’t want to extend any risk because of the growing uncertainty around the elections,” said Stephen Innes, APAC trading head at OANDA in Singapore.

Opinion polls show strong chances that the Democratic Party may win control of the House of Representatives in the November 6 midterm elections after two years of wielding no practical political power in Washington, with Republicans likely to keep the Senate.

“We are seeing increasing weariness that the US dollar could run out of steam, which naturally plays into gold... If we get a little bit of escalation of US political risk that plays even more favourably into gold,” Innes added.

The dollar index, which measures the greenback against a basket of six major currencies, edged down about 0,1 percent.

Dollar-denominated gold, which is used as an alternative investment during times of political and financial uncertainty, becomes less expensive for users of other currencies when the green-back weakens.

Asian stocks were hammered as fears of faster rate hikes in the United States and uncertainty around the Sino-US trade war dented risk sentiment. – Reuters.