Yellow Metal Gains Hawkish Momentum Over Cautious Investors Stance on Geo-Political Events

Gold prices held steady on Monday as investors were cautious ahead of the U.S. congressional elections due on Tuesday which will determine whether the Republican or Democratic Party controls Congress. Traders don’t want to extend any risky bets because of the growing uncertainty around the elections. Opinion polls show strong chances that the Democratic Party may win control of the House of Representatives in the Nov. 6 midterm elections after two years of wielding no practical political power in Washington, with Republicans likely to keep the Senate.

Investors are seeing increasing weariness that the U.S. dollar could run out of steam, which naturally plays into gold if we get a little bit of escalation of U.S. political risk that plays even more favorably into gold.

Crude Oil Price Falls On News of US Granting Exception to 8 Countries For Iranian Crude Oil Import

Dollar-denominated gold, which is used as an alternative investment during times of political and financial uncertainty, becomes less expensive for users of other currencies when the greenback weakens. As of writing this article, spot gold XAU/USD is currently trading near flat at $1233.72 an ounce up by 0.07% on the day, while US gold futures are trading at $1235.30 an ounce up by 0.16% on the day.

Market reports on a potential escalation in U.S.-China trade tariffs have laid fundamental support levels for the safe-haven asset as investors worry on weaker conditions in the global economy. The United States and China are not close to a deal to resolve their trade differences, the White House’s top economic adviser said on Friday, adding that he was less optimistic than before that such an agreement would come together. Spot Silver XAG/USD is currently trading flat at $14.73 an ounce down by 0.06% on the day.

Oil prices fell on Monday as the start to U.S. sanctions against Iran’s fuel exports was softened by waivers that will allow some countries to still import Iranian crude, at least temporarily. Ahead of update of waivers, crude oil market saw a heavy decline in price action in both Brent & WTI benchmarks with Brent losing more than 16% in value since early October, while WTI has declined by more than 18% since then. This came as traders cut their bullish wagers on crude futures to a one-year low by the end of October, the fifth consecutive cut during a month when prices posted their largest drop since July 2016, data showed on Friday.

Prices have been coming under pressure since it became clear that Washington was allowing several countries to continue importing crude from Iran despite the sanctions, which officially started on Monday. Spot Crude WTI/USD is currently trading at $62.74 down by 0.05% on the day.