Gold fell 1% on a stronger dollar on Wednesday after the latest voting tallies from the U.S. presidential election showed a tight race, with President Donald Trump winning in Florida and leading in a few other battleground states.
Spot gold fell 0.9% to $1,890.99 per ounce by 0750 GMT. U.S. gold futures dropped 1% to $1,891.30 per ounce.
“The knee-jerk climb in the dollar index heaped downward pressure on the precious metal,” said FXTM market analyst Han Tan.
“With the Blue Wave’s path now obfuscated, a divided Senate threatens to slow any passage of fresh U.S. fiscal stimulus. Such prospects are dampening gold’s ability to push higher for the time being.”
Trump won the battleground states of Florida, Ohio and Texas, while Democratic rival Joe Biden said he was on track to winning the White House by taking three key Rust Belt states.
Betting market odds have begun to tighten after flipping in favour of Trump, according to data from three aggregators.
“The confidence that market participants had earlier about a clear result is slipping,” said Harshal Barot, senior research consultant for South Asia at Metals Focus.
But there is a set of strategic investors keen to buy any major dips in gold and “there’s still a lot of uncertainty ahead for the global economy in terms of rising virus cases and fresh lockdowns,” Barot said.
The dollar was up 0.6% against a basket of major currencies.
Silver was down 2.8% a $23.50 per ounce, having fallen as much as 3.9% earlier. Platinum fell 1.8% to $850.86 and palladium slid 2.3% to $2,230.29.
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