Gold prices edged up during Asian trading hours on Tuesday, extending marginal gains made in the preceding session after some bargain hunting helped driving up the demand at a time when global investors are over cautious in the backdrop of economic uncertainty stemming from Presidential elections, flaring up of euro zone crisis and one-a-decade leadership change in China. Silver prices also edged higher in early trading on Tuesday.
At around 6:00 a.m. EST, spot gold edged up 0.41% to $1,690.94 an ounce while U.S. gold futures for December delivery gained 0.5% to $1,691.70 an ounce.
On Tuesday, the entire spotlight will be on U.S. Presidential elections. With most opinion polls showing even- Steven between President Obama and Mitt Romney, market participants are treading with caution ahead of the elections’ outcome. While President Obama’s victory could augur well for bullion prices due to his support for monetary easing measures, Romney’s win could put pressure on metal’s prices as he has shown dismay over quantitative easing.
However, analysts point that current lull in the bullion market is only due to cautious sentiment; and, , regardless of the election outcome , gold prices would not drift further as Federal Reserve can’t take back its monetary easing measures nor economic indicators are strong enough to convince the central bank to cut short its QE3.
“It is more sentiment-related, since the stimulus measures already announced by the Fed can't be taken back and the election result won't change the economy overnight,” commented a Shanghai-based trader while speaking to Reuters.
Meanwhile, in Greece, tensions erupted again as the Country’s Parliament prepares to vote on austerity drive even as workers called for nationwide 48 hours strike, protesting against spending cuts. If Greece needs to secure next round of bailout funds then it will have to adhere with its austerity program. Also China will be under investors lens as once-a-decade leadership change takes place in next few days. Bullion investors will be keen to find out whether the new leadership will provide any additional economic stimulating measures to shore up the economy.
Holdings in Gold-Backed ETF’s Stable
A data provided by Reuters showed that holdings of gold-backed exchange-traded funds stood at 75.074 million ounces as of November 4, slightly off from its record holdings of 75.086 million ounces, reached during late October.
