By Eileen Soreng
BENGALURU (Reuters) - Gold prices were little changed on Tuesday ahead of the U.S. midterm elections that may fuel interest in the metal as a hedge against risk if the result sparks volatility in the wider financial markets.
Spot gold was largely unchanged at $1,231.20 per ounce, as of 0747 GMT, while U.S. gold futures were up 0.1 percent at $1,233.8 per ounce.
"Investors are waiting for more clarity on the elections... They're possibly waiting to get an idea of how the dollar will move, the U.S. markets will get impacted," said Hareesh V, head of commodity research at Geojit Financial Services.
Opinion polls show strong chances the opposition Democratic Party may take over the House of Representatives after two years of wielding no practical political power in Washington, while Donald Trump's Republican Party is likely to retain the Senate.
"With polls skewing toward Democrat gains we are beginning to see uncertainty-led volatility across the precious complex, underpinning price action towards $1,225, however lacking the follow through bid interest to test above $1,235," traders at MKS PAMP said in a note.
Bullion traders also awaited a meeting of the Federal Reserve due later this week to gauge the outlook for U.S. monetary policy, analysts said.
"There is an expectation of another rate hike from the Fed... But whatever rate hike is going to come has already been priced in gold," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
Higher U.S. interest rates tend to boost the dollar, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
In the wider markets, the dollar held in tight ranges versus its major rivals on Tuesday, while Asian shares wavered with sentiment tempered ahead of the vote, the first major electoral test of President Donald Trump's big tax cuts and hostile trade policies.
Meanwhile, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.23 percent to 757.29 tonnes on Monday.
Among other precious metals, silver was flat at $14.63 per ounce and palladium was down 0.3 percent at $1,129.38.
Platinum rose 0.2 percent to $865 per ounce. Prices had touched their highest since June 25 at $873 in the previous session.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)