(Updates prices)
* Dollar index falls 0.6 pct
* Democrats will control House for first time in eight years
* Investors await U.S. Fed's two-day policy meeting
* Platinum hits more than 4-month high
By Swati VermaBENGALURU, Nov 7 (Reuters) - Gold rose on Wednesday as U.S.mid-term elections delivered a split Congress and pressured thedollar, with investors now turning their attention to a FederalReserve meeting for clues on future interest rate hikes.Spot gold was up 0.4 percent at $1,230.68 per ounceat 1333 GMT, while U.S. gold futures climbed 0.5 percentto $1,232.10 an ounce."This outcome of the mid-term elections was expected by thefinancial markets. It would have been a big thing if gold wassurprised by that," said Julius Baer analyst Carsten Menke."Today we just see gold moving in lock-step with dollar, thedollar is down and that is what is mirrored in the gold price."The dollar index fell more than half a percent,making bullion more attractive for holders of other currencies,as a split Congress dampened expectations for a major fiscalpolicy boost to the economy.Democrats won control of the U.S. House of Representatives,giving them the opportunity to block President Donald Trump'spush for a further round of tax cuts and deregulation - measuresthat have turbo-charged the U.S. economy, stock markets and thedollar, and have kept the Fed on a policy-tightening path. "This will presumably put paid to any further tax cuts,which means in the longer term that the Fed will need toimplement fewer rate hikes, which per se will have a negativeimpact on the U.S. dollar," Commerzbank analysts said in a note."President Trump may instead focus more on foreign policy,which is likely to generate additional uncertainty. Gold wouldprofit long-term from both factors."
Investors often turn to gold as insurance at times offinancial and political uncertainty.Market participants will now keep a close eye on a two-dayFed meeting starting later in the day to gauge the outlook forU.S. monetary policy.While the Fed is expected to keep interest rates steady,markets are waiting to see whether it offers clues aboutpossible rate increases in December and in 2019.Meanwhile, holdings of the world's largest gold-backedexchange-traded fund, SPDR Gold Trust , fell for the thirdstraight session to 756.70 tonnes on Tuesday. Among other precious metals, silver rose 0.9 percentto $14.67 per ounce, while palladium jumped 1.2 percentto $1,129.60 per ounce.
Platinum was up 0.6 percent at $873 an ounce afterhitting $877.50, its highest in more than four months. (Reporting by Swati Verma in Bengaluru; Editing by Adrian Croftand Louise Heavens)
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