SMM: COMEX gold futures closed at an one-week high on Tuesday as investors focused on the uncertainty of the outcome of the US election and the Federal Reserve's two-day policy meeting this week.
The most actively traded COMEX12 monthly gold futures contract rose $17.90, or nearly 1 percent, to settle at $1910.40 an ounce, the highest close since Oct. 27, at 13:30 new York time.
December silver futures closed up 30. 1 cents at $24.334 an ounce.
January platinum futures rose $15.50 to settle at $875.0 an ounce.
December palladium futures rose $77.40 to settle at $2297.80 an ounce.
Among other COMEX metals, the December copper contract rose 1.55 cents to settle at $3.0925 a pound.
Analysts said gold prices were supported by fears that the election results might be delayed because of the size and scope of mailing ballots in most states.
Jeffrey Sica, founder of Circle Squared Alternative Investments, said the only driving force behind gold prices was that the US election was likely to be chaotic as no president was expected to be elected tonight.
Although Democrat Joe Biden has been ahead in national opinion polls, the competition in swing states is neck-and-neck, and the results may not be known for several days because of delays in counting votes.
Sica said gold prices would break above $2000 an ounce before the president's inauguration, which is likely to hit a record high, adding that gold prices would maintain strong momentum until the next president was identified, after which it would depend on further stimulus measures.
Adrian Ash, head of research at BullionVault, said: "the rise in gold prices just brings us back to the trading level of a week ago, and it looks more like closing positions before the results come out than building new long positions."
But the underlying demand for spot gold "remains positive and the longer-term outlook remains bullish." No matter who wins the election, the White House will sacrifice record deficit spending with the help of the Fed's unprecedented monetary stimulus in response to the novel coronavirus epidemic.
Rhona O'Connell, head of market analysis at StoneX, said fundamental sentiment remains optimistic and when we learn about the election results, it is likely to be good for gold because of the possible weakness of the dollar, new stimulus measures, negative interest rates and the possibility that [the Fed] may start buying longer-term assets.
Trading in gold has been volatile in recent weeks, but it managed to stay above $1900 on Tuesday amid concerns about the outcome of the US election and the spread of the epidemic in many states.
Edward Moya, a senior market analyst at Oanda, said in a report that gold prices on election day and "all the subsequent volatility may suggest that the Fed will take more action and Congress still needs financial support."
The Fed will end its policy meeting on Thursday, two days after election day, and is expected to express its willingness to provide more monetary stimulus if necessary.
Commodities traders said further support from the Fed could support gold and silver prices.
