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Gold rose on Thursday as uncertainty over the outcome of the US election upheld the safe-haven demand for bullion and weakened the dollar, offsetting signals from the Federal Reserve that it could hike interest rates next month.
Spot gold rose 0.5 per cent to $1,303.42 an ounce at 0332 GMT. The yellow metal touched a high of $1,307.76 in the previous session, its best since October 4.
US gold futures were down 0.3 per cent at $1,304.70 per ounce.
“Some people think that Donald Trump would become the US president and if that happens it is negative for the U.S. dollar and positive for gold,” said Jiang Shu, chief analyst at Shandong Gold Group.
“On the other hand, the US dollar has been rising for almost a month and it needs some technical correction.”
Narrowing polls
Narrowing polls have led markets to price in more risk that Republican Donald Trump might defeat his Democratic rival Hillary Clinton in next week’s contentions US presidential election, perhaps remembering the turmoil that followed the surprise Brexit vote.
The dollar nursed its losses on Thursday as election concerns overshadowed this week's signals from the Fed that it was on track to hike interest rates next month as the economy gathers momentum and inflation picks up.
Dollar index
The dollar index, which measures the greenback against a basket of currencies, fell 0.3 per cent to 97.148.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, and also boost the dollar, making the metal more expensive for those holding other currencies.
“Non-farm payrolls data on Friday and US election on Tuesday should provide plenty of volatility,” said MKS PAMP Group trader Jason Cerisola.
Non-farm payrolls data
The key non-farm payrolls report will be released on Friday. Employers are expected to have added 175,000 jobs in October, according to the median estimate of 106 economists polled by Reuters.
“Even bad data won’t change the idea of a rate hike as the Fed has shown that there is a high probability for a rate hike in December,’’ Jiang Shu of Shandong Gold Group said.
Among other precious metals, silver was up 0.8 per cent at $18.57 an ounce. It hit a high above $18.73 on Wednesday, its best level since October 4. Platinum rose 0.5 per cent to $993.80. Palladium was firm at $629.10.
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