On Wednesday gold made a break for $1,300 an ounce with December futures trading on the Comex market in New York exchanging hands at $1,298.50 an ounce in early morning trade, up nearly 1% from yesterday’s close and the highest since October 4.
The gold price is being boosted by weakness in the US dollar with the currency coming under pressure from the uncertainty surrounding a tightening US presidential contest.
Both candidates have espoused trade policies that could stimulate demand, with gold offering a potential “protection against protectionism”
A Clinton win would be supportive of the gold price, but a Trump triumph could spark as much as a $200 an ounce jump in the price HSBC Chief Precious Metals Analyst James Steel is quoted by Bloomberg as saying adding that the metal could “enjoy at least a 8 percent jump whoever wins the race”:
Both candidates have espoused trade policies that could stimulate demand, with gold offering a potential “protection against protectionism,” he says. Even the relatively more internationalist Democratic candidate has argued for the renegotiation of longstanding free-trade agreements. That’s positive for gold — even if “not on the scale of Mr Trump’s agenda.
Reuters quotes Craig Erlam, senior market analyst with Oanda in London as saying “the resurgence of Donald Trump in the polls so close to election day has seriously rattled investors”:
“It’s been clear for some time now that markets would much prefer the stability that a Clinton victory would bring for the U.S. economy and the reaction over the last 24 hours or so since the polls started to change so dramatically just confirms this.”
Year to date gold is managing gains of more than 22% or $238 an ounce, one of its best annual performances since 1980.