BLBG:Gold Trades Near Nine-Week Low Before U.S. Presidential Vote
Gold traded near a nine-week low before the U.S. presidential election that may determine the direction of monetary and fiscal policy in the largest economy.
Spot gold was little changed at $1,684.85 an ounce at 3:12 p.m. in Singapore, after rebounding from yesterday’s low of $1,672.75, the cheapest since Aug. 31. Gold has rallied 7.8 percent this year as central banks including the Federal Reserve took steps to shield their economies hurt by Europe’s crisis.
U.S. voters decide today between giving President Barack Obama another four years in office or changing course with Republican challenger Mitt Romney. 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.
“Bullion markets should be dominated by the U.S. elections,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. A victory for Romney “could push interest rates up and an Obama re-election could lower them. Lower interest rates historically have helped gold.”
Gold’s rally may be at risk if Romney wins as he may replace Fed Chairman Ben Bernanke at end of his term and easing may end earlier than expected, Francisco Blanch, commodities research head at Bank of America Merrill Lynch, said yesterday.
Gold for December delivery rose 0.2 percent to $1,686.80 an ounce on the Comex in New York. The U.S. added 171,000 jobs in October, compared with a forecast of 125,000 and a revised 148,000 gain a month earlier, Nov. 2 data showed. The dollar weakened against most of its 16 major counterparts today.
China’s Imports
Bullion of 99.99 percent purity on the Shanghai Gold Exchange rose for the first time in three days, gaining 0.4 percent to 339.47 yuan a gram ($1,690.62 an ounce). Volumes for the benchmark cash contract fell to 3,416 kilograms yesterday from 4,007 kilograms on Nov. 2.
Gold imports by mainland China from Hong Kong climbed to 69.71 metric tons in September from 53.51 tons a month earlier, Hong Kong government data showed yesterday. Net imports, excluding flows from China to Hong Kong, were 41,559.5 kilograms in September from 27,011 kilograms a month earlier.
Cash silver was little changed at $31.21 an ounce, after earlier gaining 0.2 percent. Spot platinum rose 0.5 percent to $1,549.97 an ounce, snapping a two-day drop. Palladium climbed for a second day, adding 0.7 percent to $616.15 an ounce.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
