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Gold Moves Higher Ahead of Presidential Election

Release Date: 
Monday, November 5, 2012

Gold Moves Higher Ahead of Presidential Election

The price of gold moved higher on Monday ahead of the Presidential election.  Gold was $6.70 higher at 7:14 a.m. Pacific Time on the New York Spot Market, trading at $1,684.60 per ounce.  Spot silver was $.09 higher, trading at $31.10 per ounce.  (Click here for the most current spot prices.)

Gold recovered some of the lost ground from Friday’s session where stronger economic data sent the metal lower, but a stronger dollar on renewed concern over the euro zone capped gains.

"Although the race is close, I think if Romney won, it would be a shock to the market," said Mitsubishi precious metals strategist Matthew Turner.  "The general expectation is of an Obama victory, which is more of the same. That's bullish for gold," he noted, referring to expectations for continued easy monetary policy and low interest rates and potentially higher inflation in the future.

"The outcome of a divided Congress, and in turn much back and forth disagreement surrounding the fiscal cliff and the debt ceiling, would be gold supportive," UBS said in a note.

Julian Jessop at Capital Economics expects a new catalyst for a stronger rebound in gold.  “This is likely to come soon in the form of a renewed escalation of the crisis in the euro zone and a revival of safe-haven demand,” he said.

Marc Ground, an analyst with Standard Bank, said in a note that gold prices were likely to rebound, as "it is highly unlikely that stronger-than-expected data will be met by tighter monetary policy anytime soon."

According to Li Ning, an analyst at Shanghai CIFCO Futures, “easing monetary policy is still a global trend.”

(Sources: “PRECIOUS-Gold recovers from 9-week low ahead of U.S. election,” Reuters, November 5, 2012; “PRECIOUS-Gold firms but gains limited by strong dollar,” Reuters, November 5, 2012;

Dollar strength keeps gold gains in check,” Marketwatch, November 5, 2012; “PRECIOUS METALS: Comex Gold Edges Higher After Two-Month Low,” Wall Street Journal, November 5, 2012)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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