BLBG:Gold Set for Longest Winning Run in 2 Months on Obama Win
Gold gained for a third day in London, heading for the longest winning streak in two months, on expectations the U.S. will keep stimulus measures to boost the economy after President Barack Obama won re-election.
Obama defeated Republican Mitt Romney, becoming only the second Democrat since Franklin Roosevelt to win another term. The Fed said Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until mid-2015. The U.S. dollar weakened as much as 0.4 percent against a six-currency basket. Bullion usually moves inversely to the greenback.
“Obama’s victory gives confidence that the Fed’s quantitative easing will continue unhindered,” said Bjarne Schieldrop, the Oslo-based head of commodity research at SEB AB.
Gold for immediate delivery gained 0.6 percent to $1,726.15 an ounce by 9:02 a.m. in London. It rallied as much as 0.8 percent to $1,729.70 an ounce, the highest since Oct. 23. Gold for December delivery rose 0.6 percent to $1,725.70 an ounce on the Comex in New York.
Gold futures climbed 1.9 percent yesterday, the most since Sept. 13. They jumped 4.2 percent on Nov. 4, 2008, the day Obama was elected for his first term, and more than doubled during the four years of his presidency.
“Investors are probably convinced that an extension of a Democrat in the White House would ensure a continuation of the Fed’s easy monetary policy,” Barnabas Gan, an economist at Oversea-Chinese Banking Corp., said from Singapore.
Bullion advanced 10 percent this year and is set for a 12th annual gain after central banks took steps to stimulate economies hurt by Europe’s debt crisis.
Obama will need now to address a so-called fiscal cliff of more than $600 billion in tax increases and spending cuts that take effect in January unless Congress can reach a budget compromise.
Silver for immediate delivery added 0.6 percent to $32.19 an ounce after a 2.6 percent jump yesterday. Spot platinum increased 0.8 percent to $1,566.75 an ounce and palladium advanced 0.9 percent to $624.20 an ounce.
To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
