Gold was little changed in choppy trading on Wednesday, as markets awaited the outcome of the U.S. Senate runoff elections in Georgia that will likely shape fiscal policy in the President-elect Joe Biden administration.
Spot gold was unchanged at $1,949.07 per ounce by 0242 GMT after hitting a near two-month peak at $1,954.97 earlier in the session. U.S. gold futures eased 0.2% at $1,951.20.
“The market is very reactive to the (exit) polls. (But) It will hoover up dips in gold regardless of who wins because the general view right now is reflation trade,” said Axi chief global market strategist Stephen Innes.
Polls closed in Georgia’s dual runoff elections that will determine both control of the U.S. Senate and Biden’s ability to push through an ambitious legislative agenda.
While Democrat candidates jumped to early leads in preliminary voting returns, the outcome may remain in doubt for days if the margins are razor-thin.
“We can have a little bit of a slide lower if we get a Republican majority but ultimately the bid side of gold remains pretty much entrenched on the forward looking inflation narrative. Gold still has the chance to reach $2,000 by the end of the month,” Innes said.
Investors also awaited the minutes of the U.S. Federal Reserve’s Dec. 15-16 policy meeting scheduled for release at 1900 GMT.
“The underlying motivations in gold are unchanged, with lower interest rates, high inflation expectations, weaker dollar, all these are supportive for gold in the near to long term,” said Howie Lee, an economist at OCBC Bank.
The Fed might decide to unleash more monetary stimulus once it has a clearer picture on how the U.S. Congress turns out, he added.
Silver shed 0.7% to $27.39 an ounce. Platinum fell 1.4% to $1,095.82, while palladium eased 1% at $2,442.42.
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