Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

PRECIOUS-Gold breaks above $1,300/oz on U.S. election worries

Published 03/11/2016, 01:55 am
Updated 03/11/2016, 02:00 am
© Reuters.  PRECIOUS-Gold breaks above $1,300/oz on U.S. election worries
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-
GLD
-

* Composite poll shows Clinton lead narrowing

* Coming up: Fed policy meeting decision, 1800 GMT

* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates prices, adds comment)

By Jan Harvey

LONDON, Nov 2 (Reuters) - Gold rallied to a one-month high on Wednesday as uncertainty over the outcome of the U.S. election knocked stocks and the dollar lower and burnished the appeal of precious metals as a haven from risk.

Investor anxiety over the election after the renewal of an FBI probe into Democratic candidate Hillary Clinton's emails knocked European stocks to near four-month lows and sent the dollar to its weakest since Oct. 11 on Wednesday. MKTS/GLOB

Spot gold XAU= hit a peak of $1,304.72, its highest since Oct. 4, and was up 1.1 percent at $1,302.20 an ounce at 1435 GMT. U.S. gold futures GCv1 for December delivery were up $15.40 an ounce at $1,303.40, off an earlier high of $1,306.10.

In the event of a Trump victory, Davis Hall, head of FX and precious metals at Indosuez Wealth Management, said: "You have uncertainty at the level of the Fed, you might not see rate hikes, you're going to see less growth, and more deflation."

"You're ticking nine out of 10 boxes in favour of gold."

Traders were starting to reconsider long-held bets of a victory for Democratic candidate Hillary Clinton amid signs Republican Donald Trump could be closing the gap after the FBI's announcement of the new email probe on Friday.

A Reuters/Ipsos opinion poll on Monday showed Clinton held a five percentage point lead over Trump, but other polls showed her lead slipping more sharply. Real Clear Politics, which averages the results of most major polls, shows it had dropped from 4.6 points on Friday to 2.5 points on Monday.

Markets were also awaiting direction on the timing of a U.S. interest rate hike from a two-day Federal Reserve policy meeting, which is due to conclude later in the day.

"The chance of rates being hiked today are slim to none," Marex Spectron said in a note. "What will be closely looked at is the wording of the accompanying announcement, as to whether December is on the cards."

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, and also boost the dollar, making the metal more expensive for those holding other currencies.

The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares GLD , reported its first inflow in just over a week on Tuesday, of 2.7 tonnes. Last month the fund reported a net outflow of just over 5 tonnes. GOL/SPDR

Among other precious metals, silver XAG= was up 1.3 percent to $18.56 an ounce. Earlier in the session, the metal hit a high of $18.65, its highest since Oct. 4.

Platinum XPT= was up 0.1 percent to $991.20 an ounce and palladium XPD= was down 0.4 percent at $627.97.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-2016 asset returns

http://reut.rs/1WAiOSC

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.