Gold futures were trading higher early Tuesday as investors focused on uncertainty around the outcome of the U.S. elections and the Federal Reserve’s two-day policy meeting this week.
“Gold prices are rising ahead of Election Day and all the turmoil that comes with it and before a Fed policy meeting that will likely signal they are about to do more, and that Congress still needs to deliver fiscal support,” wrote Edward Moya, senior market analyst at Oanda, in a note.
Gold has seen choppy trade in recent weeks but has managed to hold above $1,900 amid concerns about the outcome of the U.S. election and the spread ofCOVID-19 in many U.S. states.
Bullion remains supported by worries about expected delays in election results due to the size and scope of mail-in voting in most states, analysts said.
Fears of civil unrest or a contested election result, where the apparent loser declines to concede defeat, also are viewed as buttressing prices for gold and other precious metals.
“Safe-haven flows continue to pour in on contested election concerns, delays in knowing the Senate race outcomes, and fears of post-election unrest,’ Moya wrote.
The Fed also will conclude its policy meeting on Thursday, two days after Election Day, with the central bank expected to communicate a desire to provide more monetary stimulus, if needed.
Further support from the Fed could be supportive to gold and silver prices, commodity traders have said.
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