(Bloomberg) -- Gold held steady as markets weighed U.S. President Joe Biden’s decision to end his reelection bid, sparking fresh questions about the impact on Donald Trump’s chances of returning to the White House.
Spot bullion was near US$2,400 an ounce Monday in London, paring earlier gains. Biden said he would serve out his term and endorsed Vice President Kamala Harris to replace him as a candidate, though she still must secure the official nomination at the Democratic National Convention next month.
“A tighter race could lead to heightened geopolitical risk later in the year,” a report from BMO Capital Markets said. Gold is considered a safe haven asset.
Still, onlookers have mixed views on what a potential Trump victory would ultimately mean for the precious metal. Some markets have ramped up bets on a so-called “Trump trade” amid expectations for higher trade tariffs, increased U.S.-China tensions and looser fiscal policy under his leadership.
That’s resulted in support for the dollar and rising Treasury yields — both typically headwinds for gold, which doesn’t pay interest.
Bullion rose to a record last week after finding support as bets have increased the U.S. Federal Reserve will pivot to monetary easing. Lower interest rates are typically positive for gold.
Spot gold was broadly steady at $2,404.35 an ounce by 10:58 a.m. in London. The Bloomberg Dollar Spot Index was down 0.2 per cent, while U.S. 10-year Treasury yields also dropped.
Silver and platinum also fell, while palladium was little changed.
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