Picture used for illustrative purpose. File

GulfToday Report

Price of Gold dipped on Wednesday as dollar advanced after the early outcome of the US election didn’t turn out as expected.

Spot gold fell 0.5% to $1,898.97 per ounce by 06:42 GMT, paring losses from a more than 1% fall earlier after some investors used price dips to buy gold. US gold futures dropped 0.5% to $1,900.20 per ounce.

Kyle Rodda, IG Markets analyst said the market is losing confidence in a clear run to a Biden victory at the moment ... We have seen the Biden trade unwind and a big effect of that is that we have seen the dollar strengthen.

Trump emerged the winner in Florida taking the lead in other US swing states. However, Biden is positive he would emerge the winner. 

READ MORE 

Gold edges down as investors await result of the US presidential election

European stocks, Asian stocks advance on US election day

China issues rules to regulate online micro-lending business

Harshal Barot, senior research consultant for South Asia at Metals Focus said, market participants are losing their confidence. A definitive outcome will determine the direction of the gold market.

Beyond the uncertainty of the winner, some strategic investors are still keen on buying major dips in gold. But the global economy is still unpredictable due to the second wave of coronavirus, she added.

If Biden wins, he is expected to inject large stimulus to help the economy.

Gold is seen as a hedge against inflation and currency debasement, likely to result from the large stimulus.

Silver fell 1.7% to $23.75. Platinum dropped about 1% to $858.38 and palladium slid 0.5% to $2,270.78.