By Sumita Layek
BENGALURU (Reuters) - Gold held a narrow $5 range on Monday as investors were cautious ahead of the U.S. midterm elections, which will determine whether the Republican or Democratic Party controls Congress.
Spot gold was little changed at $1,232.00 per ounce, by 1005 GMT, while U.S. gold futures were flat at $1,233.2 per ounce.
"The market is adopting a wait and see approach," said Saxo Bank analyst Ole Hansen.
"We are just a day away from the U.S. midterm election, the outcome of which could have an impact both on currencies and several asset classes, so we're holding relatively stable."
Opinion polls show strong chances that the Democratic Party may win control of the House of Representatives in the Nov. 6 elections after two years of wielding no practical political power in Washington, with Republicans likely to keep the Senate.
The dollar index was down 0.1 percent after three consecutive weeks of gains as investors took profits before the elections that may fuel a new bout of volatility for global markets.
"Midterm elections may stimulate safe haven buying," said Vandana Bharti, assistant vice president of commodity research at SMC Comtrade Ltd.
"If it stays above $1,240, then the next target for the upside should be $1,250- $1,260."
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.23 percent to 759.06 tonnes on Friday.
Hedge funds and money managers raised their net short position in gold by 18,723 contracts to 45,622 contracts in the week to Oct. 30, according to U.S. Commodity Futures Trading Commission data. This was the highest in three weeks.
Among other precious metals, silver was up 0.2 percent at $14.74 per ounce.
Platinum edged up 0.2 percent to $868.70 per ounce, the highest since June 25, while palladium rose 0.7 percent to $1,124.30.
(Reporting by Sumita Layek and Eileen Soreng in Bengaluru; editing by Louise Heavens)
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