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Gold Moves Higher on Election Day

Release Date: 
Tuesday, November 6, 2012

The price of gold moved significantly higher on Tuesday as Americans voted in the Presidential Election. .Gold was $29.30 higher at 11:48 a.m. Pacific Time on the New York Spot Market, trading at $1,715.40 per ounce.  Spot silver was up $0.83, trading at $32.11 per ounce.  (Click here for the most current spot prices.)

Analysts weighed the possible outcomes from the U.S. election on future gold prices. Peter Fertig, a consultant with Quantitative Commodity Research, said “the overriding sentiment in the gold market after the election will be the outcome in dealing with the looming fiscal cliff.”  David Govett, head of precious metals at Marex Spectron, said the resolution of the fiscal cliff is even more important for the gold market than the outcome of the election.

David McAlvany, CEO of McAlvany Financial Group, said that the long-term picture for gold is positive, regardless of who wins the election.  He said that the risks of the fiscal cliff to the economic recovery is one concern that has not been fully appreciated in gold’s valuation by the market.  “We’re assuming that our legislators in the U.S. are going to be rational actors, work across the aisle and come up with something, and I would not necessarily bet that way.”  He added, “I’m not sure that they have the competence to work together, even after the election results.”

China’s imports of gold from Hong Kong during September climbed 30 percent from August and were 23 percent more than a year earlier.  Importers in India have been buying gold in the week preceding key festivals as prices hovered near their lowest level in more than 10 weeks. "With gold below $1,700 physical gold demand out of Asia has picked up substantially in the past few days."

(Sources: “PRECIOUS METALS: Gold Gains on View Price Drop Spurred Buying,” Wall Street Journal, November 6, 2012; “PRECIOUS-Gold hovers near 9-week low; eyes U.S. vote,” Reuters, November 6, 2012; “Both Presidential Candidates are Good for Gold,” CNBC, November 5, 2012; “PRECIOUS-Gold recovers from 9-week low ahead of U.S. election,” Reuters, 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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