November 7, 2018 / 6:53 AM / 10 days ago

CORRECTED-PRECIOUS-Gold gains as investors weigh fallout of U.S. elections verdict

 (Corrects 14th paragraph to say holdings fell for third session
on Tuesday, not Monday)
    * SPDR holdings fell 0.08 pct to 756.70 tonnes on Tuesday
    * Democrats will control House for first time in eight years
    * Dollar weakens versus all major peers

    By Eileen Soreng and Karen Rodrigues
    BENGALURU, Nov 7 (Reuters) - Gold came off a one-week low to
trade higher on Wednesday as investors sought cover from market
volatility and uncertainty surrounding the fallout of U.S.
mid-term elections results.
    Spot gold        was up 0.3 percent at $1,230.26 per ounce,
as of 0752 GMT, having touched its lowest since Nov. 1 at
$1,222.90 earlier in the session. 
    U.S. gold futures         climbed 0.5 percent to $1,232.2
per ounce.
    "The spectre of a Democrat-controlled House suggests that we
will see a little bit of risk-off in the market, which should
probably benefit gold in parts," said ANZ analyst Daniel Hynes.
    Democrats rode a wave of dissatisfaction with President
Donald Trump to win control of the U.S. House of
Representatives. 
    The win creates a clear hurdle for Republicans to easily
pass legislation through both chambers of Congress, clouding the
outlook for some of Trump's key economic proposals.             
    Wall Street stock futures and Asian shares lost steam after
Democrats won, while the dollar weakened against most of its 
major counterparts, helping the bullion's appeal among holders
of other currencies.                   
    While the outcome of the elections was broadly in line with
market expectations, a reason markets did not sell off, the
prospect of political gridlock creates some uncertainty for
investors.
    "In the short- and medium-term, gold will be bullish from
here," said Peter Fung, head of dealing at Wing Fung Precious
Metals in Hong Kong.
    Investors also awaited a two-day meeting of the Federal
Reserve starting later in the day to gauge the outlook for U.S.
monetary policy.
    Fed policymakers are not expected to raise key rates, but
traders are waiting to see whether they offer clues about
possible rate increases in December and in 2019, analysts said.
    "The outcome of the U.S. mid-term congressional elections
and a two-day U.S. Federal Reserve meeting will likely keep
trading activities tight for gold prices today," Benjamin Lu, a
commodities analyst with Phillip Futures, said in a note.
    Spot gold may break a support at $1,224 per ounce and fall
to the next support at $1,211, according to according to Reuters
technical analyst Wang Tao.             
    Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust      , fell for the third straight session
to 756.70 tonnes on Tuesday.             
     Among other precious metals, silver        rose 0.4 percent
to $14.59 per ounce, while palladium        was down 0.2 percent
at $1,114.25 per ounce. 
    Platinum        was up 0.2 percent at $869.50 an ounce. In
the previous session, it touched its highest since June 25 at
$875.70.

 (Reporting by Eileen Soreng and Karen Rodrigues in Bengaluru,
Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
  
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