Picture used for illustrative purpose. File

Gold prices fall on Tuesday, as investors anxiously wait for the outcome of the US presidential election.

Spot gold edged down 0.1% to $1,892.73 per ounce by 05:33 GMT. While US gold futures had little change at $1,893.20 per ounce.

"Sentiment is hanging by a thread at the moment... Everybody is quite unsure where the election is headed to, given the number of possible outcomes," said Howie Lee, economist at OCBC Bank.

With little gap between President Donald Trump and Democrat Joe Biden in national opinion polls there will be questions on fiscal stimulus as long as it isn’t a Democrat sweep.

An unexpected or challenged result will likely favor the dollar and weaken the gold, he added. 

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Based on election polls Biden has an outright majority nationally. However, it remains a close race between him and President Donald Trump in several states.

According to analysis a Biden win will do well for the bullion rally based on his plans to inject a potentially large stimulus aid.

Wang Tao, Reuters technical analyst said Gold is seen as a hedge against inflation and currency debasement. On the technical front, bullion has the tendency of rising to $1,912 per ounce, as it has cleared a resistance at $1,887.

On the other hand, two state-owned Chinese banks said on Monday that they could limit trading of precious metals and foreign exchange products if the US elections fuels market volatility.

Silver rose 0.1% to $24.07 an ounce. Platinum gained 0.2% to $860.46 and palladium was up by 1.1% at $2,235.88.