Gold stuck in range, little impact from US elections

BY

Democrats swept Republicans out of power in the US House of Representatives and made gains in the Senate on Tuesday, riding to victory on a wave of public discontent with the Iraq war, corruption and President George W. Bush's leadership.

There appears to be an expectation in the markets that there will be a shift in seats and this leaves us wondering how the dollar may respond.

It's even possible that the Democrats could take Senate too. Whilst some elements in the market would see a deadlock situation as negative for the U.S., other see it as a chance to see unpopular policies blocked and government spending reduced. The dollar hovered near a six-week low against the euro, awaiting he outcome of a tightly fought battle for the U.S. Senate after the Democrats gained power in the House of Representatives.

President George W. Bush's Republicans ceded control of the House to the Democrats for the first time in over a decade.

The elections may have an impact on gold because the results will surely affect the greenback.

Gold was slightly higher in a familiar range on Wednesday, waiting for leads from the currency market as dealers expected the US mid-term congressional elections to have little direct impact on the precious metal.