US election uncertainty, rate cut bets pin gold near record high levels

Gold prices hovered near all-time high levels on Tuesday, aided by U.S. election uncertainty and expectations of an interest rate cut by the U.S. Federal Reserve in November, while focus was also on a series of economic data.

Spot gold was up 0.3% to $2,748.64 per ounce as of 1031 GMT, just shy of a record high of $2,758.37 hit last Wednesday.

U.S. gold futures gained 0.2% to $2,760.80.

"Gold bulls appear to be taking advantage of the recent pause in the U.S. dollar's and yields ascent, while still enjoying the tailwinds from Fed rate cut expectations and U.S. election risks," said Han Tan, chief market analyst at Exinity Group.[USD/][US/]

"Gold should retain its upward bias and may even flirt with $2,800 in the days ahead, as long as U.S. election risks continue weighing on market sentiment while Fed rate cut expectations remain intact."

With the Federal Reserve's rate decision due on Nov. 7, investors will be scrutinizing U.S. job openings at 1400 GMT, ADP employment on Wednesday, U.S. Personal Consumption Expenditures on Thursday, and payrolls report on Friday to gauge their influence on the U.S. central bank's move.

Markets are pricing in about 96% chance of a 25-basis-point rate cut by the Fed, according to CME's FedWatch Tool.

Bullion thrives in a low interest rate environment and is considered a hedge against political and economic uncertainty.

Competition between Republican Donald Trump and Democrat Kamala Harris remains tight ahead of the Nov. 5 presidential election.

From the technical point of view, the Relative Strength Index currently at 69 suggests that the gold price is approaching the "overbought" territory, starting at 70.[TECH/C]

Spot silver was up 1.1% to $34.06 per ounce and platinum rose 1.4% to $1,047.84.

Palladium rose 0.9% to $1,230.50, after hitting a 10-month high earlier in the session on concerns over sanctions on top producer Russia.