Gold prices were edging higher after a slightly weak start, with traders seeking the safe haven investment after the dollar pared some early gains ahead of US midterm elections and the Federal Reserve’s monetary policy meeting.
The Fed is expected to hold rates unchanged this month. The central bank’s accompanying statement is likely to provide clues about future rate hikes.
The dollar index, which advanced to 96.51 on Monday and was holding steady around 96.25 earlier this morning, is currently at 96.13, up marginally from previous close.
Gold futures for December were up $7.20, or 0.59%, at $1,237.00 an ounce.
Silver futures for December were advancing by $0.038, or 0.26%, at $14.685 an ounce.
Copper futures for December were flat $2.756 per pound.
In economic news, eurozone private sector expanded at the weakest pace in over two years in October as both manufacturing and services recorded slower rates of growth, latest survey data from IHS Markit showed on Tuesday.
Eurozone’s producer price inflation accelerated for a fifth straight month in September, preliminary data from Eurostat showed. Producer prices grew 4.5% year-on-year following a 4.3% increase in August, which was revised from 4.2%. Economists had forecast a 4.3% rise in prices.
The Service sector in UK registered its slowest rate of expansion in seven months in October.
A report from IHS Markit and the Chartered Institute of Procurement & Supply on Monday showed the service sector in UK to have registered its slowest rate of expansion in seven months in October. The services Purchasing Managers’ Index dropped more-than-expected to 52.2 in October from 53.9 in September. The expected level was 53.4.
In the U.S. midterm elections, the Democrats are expected to regain control of the House while Republicans are expected to hold on to a slim majority in the Senate. Reuters notes that if Republicans retain their House majority, global stocks are likely to rally on hopes of more tax cuts.
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