Investing.com-- Gold prices rose slightly in Asian trade on Monday, with the yellow metal seeing some safe haven demand after U.S. President Joe Biden dropped his bid reelection and endorsed Vice President Kamala Harris to run in his stead.
The yellow metal was nursing a tumble from record highs last week as increased speculation over a second Donald Trump presidency pushed up long-term expectations for inflation.
Spot gold rose 0.2% to $2,405.02 an ounce, while gold futures expiring in August fell 0.3% to $2,406.50 an ounce by 00:53 ET (04:53 GMT).
Gold sees some safe haven demand amid political uncertainty
The yellow metal still remained in sight of record highs hit last week, where spot prices raced to $2,475.02 an ounce. This came amid increasing bets that the Federal Reserve will begin cutting interest rates from September.
Uncertainty over the U.S. political outlook also fueled some safe haven demand for bullion. This came to a head over the weekend after Biden’s announcement.
While Harris was endorsed by the President and most top-level Democrats, she still needs to be officially nominated as presidential candidate by the party, at a convention in August.
Trump was nominated as the Republican frontrunner last week. CBS polling data from last week showed Trump holding a slight edge over both Biden and Harris.
Analysts said that a Trump presidency could push up inflation in the long term, especially if his administration enacts more protectionist trade policies.
But uncertainty over the outcome of the U.S. elections grew after Biden’s move, given that most top Democrats were seen endorsing Harris’ nomination. Donor contributions to the Democratic party also surged past $50 million after the news.
The dollar weakened slightly, offering metal markets some relief.
Other precious were muted, with platinum futures down 0.1% to $972.80 an ounce, while silver futures steadied around $29.288 an ounce.
Copper prices drop, see little cheer from China rate cut
Among industrial metals, copper prices weakened on Monday, extending steep losses from last week amid persistent concerns over top importer China.
Benchmark copper futures on the London Metal Exchange steadied around $9,306.50 a tonne, while one-month copper futures fell 0.2% to $4.2283 a pound.
The People’s Bank of China on Monday unexpectedly cut its benchmark loan prime rate, as it moved to further loosen monetary policy and shore up economic growth.
But ANZ analysts argued that the cut was not enough, and that the PBOC was likely to cut rates further if economic growth remained subdued.
Sentiment towards China was already constrained by a slew of weak economic readings from the country.