Gold price sheds 3% for October but still underpinned by election jitters
New York (Oct 31) Gold futures fell Monday, expanding their October loss to some 3%, with a stronger U.S. dollar setting the tone.
Even with Monday’s drop, gold traded not far off a more-than-three-week high hit at the end of last week on jitters about the outcome of the U.S. presidential election.
Gold futures for December delivery on Comex GCZ6, -0.07% dropped $2.50, or 0.2%, to $1,274.30 an ounce.
December silver SIZ6, +0.13% rose 4 cents, or 0.3%, to $17.84 an ounce. Even with the gain, silver closed the books on a tough October. Futures are down 7.3% since the end of September.
The U.S. dollar gained ground versus major rivals, leaving the ICE dollar index DXY, +0.07% a measure of the U.S. unit against a basket of six major rivals, up 0.1% at 98.41. A stronger dollar can weigh on commodities priced in the currency, including precious metals, by making them more expensive to users of other currencies.
Gold rose Friday posting its highest close since Oct. 3, getting a late lift on haven-inspired buying after Federal Bureau of Investigation Director James Comey informed Congress that the agency was reviewing new evidence connected to its probe of Democratic presidential nominee Hillary Clinton’s email server.
“The market had priced in a Clinton victory and the possibility that Trump now may have a viable chance has created enough uncertainty to push some capital into a more protective mode,” said Peter Hug, global trading director at Kitco, in a note. “Until some clarity arrives on the damage, if any, that this probe will influence voters against Clinton, gold should remain bid.”
See: Expect jittery, jumpy markets as FBI email investigation continues to unfold
Also read: ‘Game-changer’ could derail a traditionally great stretch for stocks
Recent polls had shown Clinton’s lead over Republican nominee Donald Trump narrowing ahead of the latest email news. Analysts say financial markets have largely factored in a Clinton victory.
“There is still just over one week to go until the U.S. election outcome is confirmed and any sudden turns in the tide towards Donald Trump as the winner should in theory provide encouragement for gold to climb higher in valuation,” said Jameel Ahmad, vice president of market research at FXTM, in a note.
Read: Clinton’s unfavorable rating hits new high in poll
Federal Reserve policy makers are widely expected to leave rates unchanged when they conclude a two-day meeting on Wednesday, but the statement will be watched for hints of a rate rise in December. Investors overwhelmingly expect a Fed move at that meeting.
Nonfarm payrolls and other labor market data for October is due on Friday and will also be closely watched for signs the Fed is likely to move in December. Higher interest rates tend to be a negative for gold and other assets that don’t pay interest.
In other metals trade, January platinum PLF7, -0.35% fell $3.90, or 0.4%, to $977.50 an ounce, while December palladium PAZ6, +0.11% fell 25 cents, or less than 0.1%, to $616.10 an ounce.
High-grade copper for December delivery HGZ6, +0.46% rose less than 1 cent, or 0.4%, to $2.2075 a pound.
Soiurce: MarketWatch
