Gold prices hit a two-month high on Tuesday and the dollar index held close to 2-1/2-year low ahead of Georgia’s runoff elections later in the day, which will determine whether Republicans or Democrats control power in the U.S. – and with it, the likely fate of President-elect Joe Biden’s legislative agenda.
Spot gold edged up 0.2 percent to $1,946.73 per ounce, after hitting its highest since Nov. 9 at $1,947.96. U.S. gold futures were also up 0.2 percent at $1,950.80.
Biden on Monday told Georgia Democrats they had the power to “chart the course” for a generation.
President Donald Trump told a rally the fight to “drain the Washington swamp” and retain America’s destiny and dignity “has only just begun”.
The elections will determine how much Biden can push through Democrats’ agenda, including rewriting the tax code, boosting stimulus and infrastructure spending.
There are certainly hopes among market participants that the Democrats are to win both seats in the elections. That would mean that the newly elected president can pursue his announced expansionary fiscal policy.