Gold stead­ies as US elec­tion jit­ters off­set solid US data

Kuwait Times - - BUSINESS -

LONDON:

Gold stead­ied yes­ter­day, head­ing for its big­gest weekly rise since mid-Septem­ber as jit­ters over next week’s US elec­tion off­set a solid pay­rolls re­port that shored up ex­pec­ta­tions for a US in­ter­est rate hike next month.

The dol­lar gained and US stock mar­kets were set to open slightly higher, out­per­form­ing losses for coun­ter­parts in Europe and Asia, af­ter the up­beat US jobs data added to the case for a De­cem­ber rise in in­ter­est rates. That would weigh on non-yield­ing gold. How­ever, an ini­tial dip in the metal was quickly bought as in­vestors re­mained on edge ahead of Tues­day’s elec­tion.

Spot gold was at $1,303.83 an ounce at 1315 GMT, off a low of $1,295.71 in the im­me­di­ate wake of the pay­rolls data but lit­tle changed from $1,303.25 on Thurs­day. US gold fu­tures for De­cem­ber de­liv­ery were up 0.1 per­cent at $1,303.40.

“The pay­rolls data is not (pos­i­tive) enough to drive prices in a par­tic­u­lar di­rec­tion,” ING’s head of com­mod­ity strat­egy Hamza Khan said. “It’s all go­ing to be about the elec­tion on Tues­day. A Trump win would sig­nal a pos­i­tive di­rec­tion for gold, so that’s the big­ger thing to watch.”

The dol­lar in­dex was still on track for its big­gest weekly drop since mid-Au­gust af­ter the Fed­eral Bureau of In­ves­ti­ga­tion said last week it was re­open­ing a probe into Demo­crat can­di­date Hil­lary Clin­ton’s use of a pri­vate email server while Sec­re­tary of State. The FBI an­nounce­ment yes­ter­day nar­rowed Clin­ton’s lead over her Repub­li­can ri­val Donald Trump, polls showed, rat­tling fi­nan­cial mar­kets which had been pric­ing in a Clin­ton vic­tory. That helped send gold to a one-month high on Thurs­day, and has put it on track to rise 2 per­cent this week.

“Gold im­plied volatil­ity ral­lied sharply across the curve over the past week, as in­vestors ro­tated to safe haven as­sets af­ter polls tight­ened,” Citi said in a note. “As the elec­tion keeps driv­ing gold prices in the short-term, we ex­pect gold vol to re­main el­e­vated into Elec­tion Day.” Gold prices in In­dia swung to a dis­count this week as a rally in prices damp­ened re­tail de­mand and prompted jew­ellers to re­duce pur­chases, while buy­ing in lead­ing con­sumer China rose due to safe-haven buy­ing. —Reuters

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