US election result 2020: Gold price holds firm as Joe Biden leads in White House race

Gold price held firm in a narrow range on Thursday as investors were cautiously optimistic Democrat Joe Biden would edge past President Donald Trump in a tight race to the White House.

Analysts expect Biden to likely enact larger stimulus measures than his Republican incumbent, even as chances of a divided Congress could stymie Biden`s fiscal policy efforts.

Gold tends to benefit from widespread stimulus measures as it is widely viewed as a hedge against inflation and currency debasement.

Spot gold rose 0.3% to $1,909.41 per ounce by 600 GMT.

U.S. gold futures gained 0.7% to $1,909.80 per ounce.

"It`s likely Biden will secure a presidential victory and this has boosted confidence as a democratic president may point to a bigger stimulus," said Margaret Yang, a strategist with DailyFx, which covers currency, commodity and index trading.

Biden on Wednesday predicted victory after winning two critical U.S. states, while the incumbent president Trump alleged fraud, filed lawsuits and demanded recounts.

"Gold traders are not excited about this outcome," DailyFx`s Yang said, noting a contested result could mean a smaller fiscal stimulus plan.

Meanwhile, the dollar pulled back from strong gains in the previous session, making bullion cheaper for those holding other currencies.

Asian equities also gained, as markets bet that U.S. policy gridlock, a likely scenario amid dimming chances for a Democrat-controlled senate, would favour some industries.

"Markets expect a stimulus package and the certainty of an outcome, regardless of it being contested, now has reduced investors` fears and prompted them to move back into assets like gold and equities," said Michael Langford, executive director at corporate advisory and consultancy firm AirGuide.

On the technical front, spot gold looks neutral in a range of $1,887 to $1,912 per ounce, and a breakout could signal a direction, according to Reuters technical analyst Wang Tao.

Silver rose 1.4% to $24.23 an ounce. Platinum gained 0.6% to $874.98, while palladium was up 0.6% at $2,302.67.