On Wednesday (November 6), during early Asian trading, spot gold experienced slight fluctuations, currently trading around $2,743 per ounce. Gold prices rose slightly by 0.27% on Tuesday, closing at $2,743.80 per ounce. The U.S. dollar index weakened further after hitting its lowest point in nearly two weeks, providing support for gold prices. However, the overall market volatility remains low as investors are preparing for potential turmoil from the U.S. political situation. Polls indicate that former President Trump and Vice President Harris are neck and neck in the U.S. election, with the results potentially being disputed, increasing market uncertainty.
Commerzbank stated that if the election results are not determined in the short term, gold prices will benefit from the uncertainty and may even break above $2,800. Historical data shows that after Trump won the 2016 election, gold prices surged to $1,337.55 but soon retreated, indicating the market's sensitivity to election result volatility.
Aside from the election, the market is also awaiting Thursday's Federal Reserve interest rate decision. The Fed is expected to cut rates by 25 basis points, further enhancing gold's appeal as a safe haven. Low interest rates are usually favorable for gold, and gold prices have risen nearly 33% this year. Investors are closely watching whether the Fed will pause rate cuts in December.
Additionally, geopolitical situations have also impacted the market. Israeli Prime Minister Netanyahu has dismissed the Defense Minister and appointed a new minister to address the current conflict situations in Gaza and Lebanon.
