The British pound gained 0.2% against the US dollar, trading at $1.2974, as markets braced for the US presidential election. Investors are closely watching the race between Vice President Kamala Harris and former President Donald Trump as it unfolds.
The US Dollar Index (DXY), which measures the dollar against a basket of major currencies, stabilized after a significant drop on Monday. This decline followed a poll from the Des Moines Register/Mediacom that showed Harris leading Trump by three percentage points in Iowa, a critical battleground state where Trump won in both 2016 and 2020.
Additionally, the pound’s rise is supported by expectations for the Bank of England’s (BoE) upcoming policy meeting on Thursday. Many market analysts predict the BoE will cut interest rates by 25 basis points, lowering them to 4.75%.
Against the euro, the pound also saw slight gains, trading at €1.1914.
Gold Prices Hold Steady
Gold prices remained stable in early European trading on Tuesday after recent declines. Traders are awaiting news related to the US presidential election and a forthcoming Federal Reserve meeting.
Spot gold was steady at $2,735.00 per ounce, while US gold futures dipped 0.1% to $2,742.30.
Despite the current stability, analysts have projected potential increases in gold prices, with some forecasting a rise to $2,800 by the end of the year and even $3,000 by 2025. UBS attributes this optimistic outlook to several factors, including the Fed’s continued rate-cutting cycle, a weakening US dollar, and ongoing geopolitical tensions.
“Central banks are continuing to purchase gold, which is boosting investor sentiment. Overall market positions remain low, suggesting room for increased holdings, and institutional investors are showing a growing interest in gold,” stated Sharon Ding, head of China basic materials at UBS.
Oil Prices Stabilize Amid Political Developments
Oil prices experienced a modest increase in early European trading, stabilizing after a recent price surge. Traders are looking for direction from both the US presidential election and a significant political meeting taking place in China.
Brent crude futures rose by 0.2% to $75.23 per barrel, while US West Texas Intermediate (WTI) gained 0.3%, trading at $71.67 per barrel during early European hours.
This price movement comes as anticipation builds around stimulus measures from China. The Standing Committee of the National People’s Congress (NPC) began a four-day session on Monday, during which it is expected to approve additional fiscal spending. This follows a series of fiscal policies released by Beijing aimed at boosting economic growth.
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