Gold holds steady ahead of U.S. presidential vote

By Apeksha Nair

(Reuters) - Gold stuck to a narrow range during Asian hours on Tuesday as investors remained wary of the implications of the outcome of the U.S. presidential election.

The metal dropped nearly 2 percent in its previous session after the Federal Bureau of Investigation (FBI) said no criminal charges were warranted against Democratic candidate Hillary Clinton for using a private email 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 0.25 percent at $1,284.53 an ounce by 0700 GMT. The metal touched a low of $1277.70 on Monday.

U.S. gold futures were up 0.45 percent at $1,285.10 per ounce.

"The initial gold reaction to a Clinton win is likely to be negative as any shift into risk-on instruments could press gold lower, at least initially," HSBC analyst James Steel said in a note.

"Gold could drop to the $1,250-1,220 per ounce area where upon we would expect physical demand to increase and risk selling to wane," he added.

Clinton has about a 90 percent 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 cautious of the implications of the U.S. 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," said Jiang Shu, chief analyst at Shandong Gold Group.

The double uncertainty over the election and the possible U.S. 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 rose 0.6 percent at $18.32 an ounce.

Platinum was up 0.42 percent at $1004.49 an ounce. The metal hit $1008.00 earlier in the session, its highest since Oct. 4.

Palladium slipped 0.03 percent at $651.50.

(Reporting by Apeksha Nair in Bengaluru; Editing by Tom Hogue and Sunil Nair)