Sun, Nov 06, 2016 - Page 14 News List

Gold posts fourth weekly gain on US election concerns

Bloomberg

Even the prospect of higher US interest rates has not been enough to faze gold bulls as angst over the US election puts the metal on course for a fourth straight weekly gain.

Gold had its longest weekly rally since July, with buyers undeterred as a report showing steady progress in the US labor market strengthened the case for higher interest rates.

Investors are seeking haven assets, with the MSCI All-Country World Index sinking to an almost four-month low.

The jobs report comes as polls showing a tightening race ahead of US presidential election help rekindle demand for gold, which had slid last month amid signs the US economy is improving.

Analysts at Citigroup Inc are among those saying further gains could be in store for bullion should Republican candidate Donald Trump beat Democratic US presidential candidate Hillary Rodham Clinton, who is seen by some investors as the more predictable contender.

Gold futures for December delivery on Friday rose 0.1 percent to settle at US$1,304.50 an ounce at 1:42pm on the Comex in New York, taking this week’s advance to 2.2 percent.

Prices are up for a fourth straight week, the longest rally since July 8.

Citigroup said gold could climb to as high as US$1,400 per ounce if Trump wins.

Trump is stronger in Iowa and Ohio pre-election-day voting, while Clinton’s advantage in early balloting looks stronger in North Carolina and Nevada, a Bloomberg Politics analysis shows.

Payrolls last month climbed by 161,000 following a 191,000 gain in September that was larger than previously estimated, a US Labor Department report showed on Friday.

The jobless rate fell to 4.9 percent, while wages rose from a year earlier by the most since 2009.

The odds of a rate increase by the US Federal Reserve in December rose to 78 percent, from 69 percent a week ago.

The Fed this week said that it will wait for “some further evidence” of progress in the economy before raising rates.

Higher rates curb the investment appeal of gold, which does not pay interest.

Other precious metals:

Holdings in gold-backed exchange-traded funds rose 1.9 tonnes to 2,044.9 tonnes as of Thursday, data compiled by Bloomberg showed. Assets were set for the first weekly gain in three.

Silver futures slipped on the Comex, while platinum and palladium futures gained on the New York Mercantile Exchange.

Base metals:

Zinc retreated from a five-year high on the London Metal Exchange, while copper fell from its highest level since July.

The LMEX Metals Index, which tracks six major base metals, on Thursday rose to the most in more than 15 months as investors bet that a rebound in demand from China, surging coal prices and logistics issues will underpin prices.

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