Gold stuck in range, little impact from US elections

SINGAPORE, Nov 8 (Reuters) Gold was slightly higher in a familiar range on Wednesday, waiting for leads from the currency market as dealers expected the U.S. mid-term congressional elections to have little direct impact on the precious metal.

Spot gold moved between $623.70 and $626.60 an ounce, and was at $625.40/626.40 by 0503 GMT. The metal was last quoted at $624.30/625.30 in New York.

Gold may trade in a $620 to $630 an ounce range this week, with selling pressure likely to emerge at higher levels.

Physical dealers noted some selling from investors after the price rallied to a two-month high around $629 this week.

''We are in a range trade now, and I guess oil will become influential again if it rises above $65 a barrel,'' said a dealer in Sydney.

''The elections may have an impact on gold because the results will surely affect the greeenback,'' said the dealer, adding that more weakness in the dollar could help gold breach $630.

U.S. crude oil rebounded above $59 a barrel on Wednesday after a sharp 1.8 percent fall the previous day as Venezuela said it would support Saudi Arabia in a possible OPEC action to cut supplies in December.

Gold jumped to its highest since Sept. 7 at $629.40 on Monday on technical buying by hedge funds amid worries about the outlook for the dollar. Investors, who had made money in the equity and energy markets, also shifted back to gold, dealers said.

Premiums for gold bars were unchanged at between 20 and 50 U.S. cents an ounce in Singapore .

''My buyers disappeared. There's some selling around. I guess people who have bought quite a lot before the festive season need some cash now,'' said a dealer in Singapore.

''I don't think the U.S. elections have any impact on gold.

I would say $620 to $630 is the range for now,'' he said.

Democrats swept Republicans out of power in the U.S. 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,'' said Investec Australia in a report.

''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, according to TV projections in the U.S. midterm elections.

The euro was little changed at $1.2775 , having risen to $1.2820 on Tuesday, its highest level since late September.

The dollar barely changed at 117.65 yen .

The benchmark gold contract on the Tokyo Commodity Exchange , October 2007, rose five yen per gram to 2,392 yen.

Platinum fell to $1,182/1,1987 an ounce from $1,187/1,192 an ounce in New York.

Palladium was unchanged at $330/335 an ounce.

Silver edged up to $12.63/12.68 an ounce from $12.56/12.63 late in New York.

REUTERS SBA DS1304