Gold rises on eve of US election with rising global turbulence

Bullion was up for a second day, with Democratic nominee Joe Biden leading President Donald Trump nationally in the latest crop of polls, although some state races are still extremely close.

Gold climbed at the start of a crucial week that brings the US presidential election and a Federal Reserve policy meeting -- events set to dictate the trajectory of the dollar, appetite for risk, and the precious metal.

Gold has given up ground during the presidential race’s closing stages, dropping for a third straight month in October, the longest losing run for the traditional haven since April 2019. (Reuters file photo)

Bullion was up for a second day, with Democratic nominee Joe Biden leading President Donald Trump nationally in the latest crop of polls, although some state races are still extremely close. The New York Times/Siena College polls showed Biden leading the race in Pennsylvania, Florida, Arizona and Wisconsin, key swing states that Trump carried in 2016.

Gold has given up ground during the presidential race’s closing stages, dropping for a third straight month in October, the longest losing run for the traditional haven since April 2019. Still, while prices have pulled back from the record set in August, holdings in bullion-backed exchange-traded funds remain close to an all-time high as investors track the US contest, the course of the coronavirus pandemic, and central bank action.

“The possibility of post-election turmoil and a contested outcome represents a significant risk in our view, and one that could prove quite gold-positive in the most extreme scenarios,” according to RBC Capital Markets.

The Federal Open Market Committee meets shortly after Election Day on Nov 4-5. The Fed won’t increase the pace of its asset purchases this year or next, and wouldn’t meaningfully boost the US economy even if it did, according to most economists surveyed by Bloomberg ahead of this week’s gathering.

Spot gold traded 0.5% higher at $1,887.533 an ounce at 10:42 a.m. in London, extending Friday’s 0.6% gain. Silver climbed 1.2%, platinum added 1% and palladium 0.2%. The Bloomberg Dollar Spot Index was 0.1% higher after rising 1.2% last week.

Meanwhile, large swathes of Europe will enter lockdown this week as governments concluded tougher action is needed to counter the pandemic. Global fatalities topped 1.2 million, after the deadliest week for the outbreak since April.