Gold rallies as Biden inches closer to White House

Gold prices surged as investors were cautiously optimistic Democrat Joe Biden would edge past President Donald Trump in a tight race to the White House, boosting hopes of more economic stimulus. However, chances of a policy deadlock in Washington amid a divided Congress limited the safe-haven's upside.

Spot gold rose 0.4 percent to $1,910.69 per ounce by 0719 GMT, having hit a high of $1916.48 on Thursday, its highest since October 22. U.S. gold futures rose 0.8 percent to $1,911.25 per ounce.

The dollar index steadied against its rival currencies on growing expectations Democrat Joe Biden would win the U.S. presidential election but the Republicans would retain Senate control, holding back any huge COVID-19 relief package.

The count was progressing in an orderly fashion with Democratic challenger Joe Biden narrowly ahead in key states, although the risk of a prolonged contested election did remain.

Biden said on Wednesday he was headed toward a victory after claiming key Midwestern states of Wisconsin and Michigan, but Trump moved to file lawsuits in states like Georgia and requested a vote recount in several battleground states.

The Federal Reserve, which is expected to keep policy on hold on Thursday, is also in focus as traders navigate market volatility in the wake of the U.S. election.

The greenback against a basket of currencies traded 0.1 percent down at 93.23, having touched a high of 94.30 on Wednesday, its highest since September 28. The U.S. Treasury yields plunged, with the benchmark 10-year note yield trading at 0.725 percent and the 30-year yield at 1.491 percent.