Gold sought as safe haven ahead of US midterms

New York (Nov 3)  Standard Chartered said that gold has reasserted its safe-haven status ahead of U.S. midterm elections next week and in response to October weakness in the stock market.

 Any further weakness in stocks would bode well for gold prices. Although the largest gold-buying festival is a major event in the gold calendar, demand leading up to Diwali [festival in India on Nov. 7] has been weaker than normal, Standard added.

 The bank looks for demand to firm, especially if prices in India trade near the key level of 30,000 rupees per 10 grams. But external factors remain key and gold investors are likely to focus on macro events, ranging from non-farm payrolls [released Friday morning], the FOMC meeting [next week] and the U.S. midterm elections, Standard noted.

“If President Trump loses support and the USD [U.S. dollar] weakens, retail investment demand is likely to pick up, providing a more solid floor for prices, and potentially a tailwind” the firm added.

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