Gold has posted small gains in the Wednesday session. In North American trade, the spot price for one ounce of gold is $1227.90, up 0.07% on the day. On the release front, there are no major indicators in the United States. On Thursday, the Federal Reserve will set the benchmark rate and release a rate statement. As well, the U.S. releases unemployment claims.
The U.S mid-term election is over, with a new political landscape in Congress. The Democrats regained control of the House of Representatives for the first time since 2010, but the Republicans increased their slim majority in the Senate. The results are a setback for President Trump, as the Democrats will be in a stronger position to derail Trump’s plans to boost fiscal stimulus and lower taxes. This could dampen enthusiasm for the U.S dollar, and investors have reacted on Wednesday by sending the greenback broadly lower against other currencies, although gold has failed to jump on the bandwagon. Investors will be shifting focus to the Federal Reserve, which releases its monthly rate statement on Thursday. The Fed is expected to maintain the benchmark rate at a range of between 2.0% and 2.25%.
Another key event this week which could affect gold prices is the Federal Reserve policy meeting on Thursday. The Fed is expected to maintain interest rate levels, with a 93% likelihood that the Fed will stay on the sidelines. However, the rate statement will be scrutinized, with investors looking for clues regarding future monetary policy, as well as the Fed’s view of the economy. If the Fed sounds optimistic about the economy, risk appetite could rise and send gold prices lower.