- Gold witnessed a dramatic intraday turnaround amid a strong pickup in the USD demand.
- The uncertainty about the final outcome of the US election helped limit any further losses.
Gold pared a major part of its Asian session losses and now seems to have stabilized around the $1900 mark, still down around 0.50% for the day.
Following an early uptick to the $1916 region, or near two-week tops, the precious metal witnessed a dramatic intraday turnaround amid a strong pickup in the US dollar demand. The uncertainty over the US election results drove investors back towards the US dollar to hedge their positions. This, in turn, was seen as a key factor that prompted some selling around the dollar-denominated commodity.
Hopes of a blue wave in the US Congress faded rather quickly after the incumbent President Donald Trump won the key battleground state of Florida. Separately, Arizona governor said that it was too early to call the state for Biden. According to Fox News, the tally on the electoral College now stands at 233 for both Joe Biden and Donald Trump, indicating that the race is tighter than expected.
Meanwhile, results from Wisconsin, Michigan and Pennsylvania will not be declared until Wednesday evening. The uncertainty about the final outcome seemed to be the only factor that extended some support to perceived safe-haven safe-haven and assisted the XAU/USD to rebound swiftly from daily swing lows to the $1882-81 region. That said, the upside is more likely to remain limited as investors might refrain from placing any aggressive directional bets.
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