Gold prices sank

Gold edged lower on Wednesday as the dollar firmed with investors tracking two closely contested U.S. Senate runoff races in Georgia that will likely determine President-elect Joe Biden administration’s fiscal policy.

Spot gold fell 0.3% at $1,943.46 per ounce by 0355 GMT after hitting a near two-month peak at $1,954.97 earlier in the session.

U.S. gold futures eased 0.4% to $1,947.50, while the dollar rebounded from multi-year lows.

“The market is very reactive to the polls and liquidity is pretty thin. We had an initial widening in Democrats’ favor and that poll has narrowed, (but) it’s still quite uncertain, everything’s on a knife edge,” said Axi Chief Global Market Strategist Stephen Innes.

Silver shed 1.1% to $27.28 an ounce. Platinum fell 1.8% to $1,092.03, while palladium lost 1.1% at $2,439.91.

“We can have a little bit of a slide lower if we get a Republican majority but ultimately the bid side of gold remains pretty much entrenched on the forward looking inflation narrative. Gold still has the chance to reach $2,000 by month-end,” Innes said.

Meanwhile, minutes of the U.S. Federal Reserve’s Dec. 15-16 policy meeting are scheduled for release at 1900 GMT.