Gold was flat in early Asian trade, taking a breather after rebounding as oil slumped and the dollar softened in the wake of the U.S. midterms. The precious metal had climbed earlier in the session following a sharp drop in crude prices and a weaker U.S. dollar, which made gold more attractive to holders of other currencies. Traders are now assessing the political landscape after the midterm elections, which produced a split Congress and removed some uncertainty over fiscal policy.
Analysts suggest the lack of a clear majority may limit aggressive spending plans, supporting gold’s appeal as a hedge. However, with interest rates still elevated and the Federal Reserve expected to keep policy tight, gains may remain capped. Investors are watching upcoming inflation data for further clues on the rate outlook.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing