Gold was up on Thursday morning in Asia as it appeared increasingly likely that U.S. presidential candidate Joe Biden would become the next U.S. president.
Gold futures were up 0.62% at $1,908 by 12:25 AM ET (4:25 AM GMT).
The U.S. elections were the focus of investors on Thursday morning in Asia, with the race much tighter than expected. Currently, Democrat Joe Biden has 264 of the needed 270 electoral college votes according to Bloomberg, but the remaining six votes have to come from states where the results are too close call.
The anticipated outcome is a boost for gold, as a Democrat president is expected to push for a large COVID-19 stimulus package, which will in turn push gold values higher. However, sentiment was dented by the failure of a so-called Democrat Blue Wave to appear, meaning that Democrat control of the House of Representatives, Congress and the presidency is unlikely to happen. As such, the anticipated stimulus package is less likely to be as large as hoped for.
President Donald Trump is moving to contest the results in states that he narrowly lost, leading to further confusion over the result, and the prospect of a drawn out recount process that would declare no clear victor for some time.
“It’s just illiquidity breeding illiquidity and I really don’t think that will come back properly until the political situation is resolved … It’s hard to take a long-term view on something that will grind on and on.” Darius Tabatabai, head of trading at Arion Investment Management Ltd told Bloomberg.
Meanwhile, investors await monetary policy decisions from the Federal Reserve and the Bank of England, due later in the day.