Gold held to a narrow range during Asian hours on Tuesday on a steady US dollar as investors remained wary of the implications of the outcome of the US presidential election.
The metal dropped nearly two per cent in its previous session after the Federal Bureau of Investigation (FBI) cleared Democratic candidate Hillary Clinton of criminal charges related to her use of a private e-mail server.
“Election headlines are still dictating flows and the recent stability in the Clinton camp brought about via the FBI headlines has calmed the nerves of some participants for now," MKS PAMP Group trader Sam Laughlin said.
Spot gold was up 0.06 per cent at $1,282.15 an ounce by 0434 GMT.
The metal had touched a low of $1277.70 on Monday.
US gold futures were up 0.3 per cent at $1,283.30 per ounce.
The dollar index, which measures the greenback against a basket of currencies, was steady at 97.771.
“The gold market is waiting cautiously for the result of the US presidential elections,” said Jiang Shu, chief analyst at Shandong Gold Group.
“Gold will not see much volatility if Clinton becomes president, but will see a $20-$30 jump if Republican candidate Donald Trump wins,” Shu said.
Clinton has about a 90 per cent chance of defeating Trump in the race for the White House, according to the final Reuters/Ipsos States of the Nation project.
Markets also remained wary of the implications of the US election outcome on an anticipated interest rate hike by the Federal Reserve next month.
“Many people think that there will be a rate hike in December and most investors are very cautious and don’t want to bet too much on the short-term volatility of the gold price,’’ Shu said.
The double uncertainty over the election and the possible US interest rate hike have boosted demand for gold and silver in the United States, dealers said.
Spot gold is expected to retest a support at $1,277 per ounce, a break below which could cause a loss to the next support at $1,270, according to Reuters technical analyst Wang Tao.
Silver edged higher by 0.3 per cent at $18.26 an ounce, while platinum was down 0.23 per cent at $998.00.
Palladium fell nearly 1.0 per cent at $645.90 an ounce after hitting $656.90 in its previous session, its highest since October 11.