- Bullion could hit $2,800 after US election, analyst says
- Gold has risen 33% so far this year
- Traders widely expect a 25-bp Fed rate cut on Thursday
Nov 5 (Reuters) - Gold prices held steady on Tuesday as market participants braced for the outcome of the U.S. presidential election, with opinion polls suggesting a neck-and-neck race between Democrat candidate Kamala Harris and Republican Donald Trump.
Spot gold was little changed at $2,738.83 per ounce by 1045 GMT, having hit a record high of $2,790.15 last week. U.S. gold futures edged up 0.1% to $2,748.20.
The precious metal should rise if Harris wins due to her policies supporting low interest rates, but a sudden dollar spike could reduce gold's value if Trump wins, Han Tan, chief market analyst at Exinity Group, said.
"Gold traders and investors are likely to withhold their responses until early signals emanate from the U.S. presidential race," said Tan. Gold should ultimately claim the $2,800 handle "once the dust settles" after the election, he added.
Bullion, traditionally seen as a hedge against economic and political risks, has gained 33% so far this year.
The metal tends to thrive in a low interest-rate environment. The Fed's latest rate decision is also due on Thursday, along with remarks from Chair Jerome Powell and other officials.
According to the CME FedWatch tool, markets widely expect a quarter-point cut on Thursday, which would be the second U.S. rate reduction of the year after a jumbo cut in September.
The Fed meeting is clearly overshadowed by the U.S. elections and is therefore unlikely to have any significant impact on the gold price, Commerzbank said in a note.
Spot silver rose 0.4% to $32.60 per ounce, platinum added 1.3% to $996.80 and palladium was up by 0.6% to $1,081.39.
A private sector survey in top metals consumer China showed services activity expanded at the fastest pace in three months in October.
Reporting by Anushree Mukherjee and Daksh Grover in Bengaluru; editing by Christina Fincher and Jan Harvey
Source: Reuters