Gold remains steady on U.S. presidential election day

• Gold holds steady on Tuesday after hitting a new five-day low earlier in the session, as uncertainty around the U.S. presidential election lingers.
• The election outcome could significantly influence the U.S. Dollar, affecting gold prices, or potentially creating a “win-win” scenario for the precious metal.
•  Technically, indicators suggest that XAU/USD may be entering a short-term downtrend.

Gold (XAU/USD) continues to pull back from its record high, finding support at $2,724 early on Tuesday before bouncing back to the $2,740s. A slightly weaker U.S. Dollar, driven by uncertainty surrounding the U.S. presidential election outcome, is helping gold recover, as the precious metal is predominantly priced and traded in USD.

This development reflects market sentiment that the election outcome could sharply impact the U.S. currency: a win for Republican nominee Donald Trump is seen as bullish for the USD, while a victory for Democratic nominee Kamala Harris is viewed as bearish.

Gold recovers amid safe-haven flows driven by high uncertainty surrounding the U.S. presidential election outcome, with the potential for a bullish impact on the yellow metal regardless of the winner.

The well-regarded election forecaster 538.com currently indicates a 50% probability of victory for Vice President Harris on Tuesday, with former President Donald Trump holding a 49% chance, leaving a 1% chance of no decisive winner. In the past 24 hours, Harris has moved into a slight lead after trailing Trump for several days, which may also help explain gold’s rebound on Tuesday.