Gold prices fell on Monday in Asia as investors gained clarity on the U.S. presidential election and noted the growing likelihood of a U.S. rate hike in December.Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 0.90% to $1,292.75 a troy ounce. Also on the Comex, for December delivery eased 0.78% to $18.227 a troy ounce. futures for December delivery dipped 0.04% to $2.259 a pound.
The outcome of Tuesday’s U.S. presidential elections on Tuesday will capture market attention with news the FBI stood by its earlier recommendation that no criminal charges were warranted against Democrat Hillary Clinton for using a private email server likely aiding her chances over rival Donald Trump.Also later in the week, trade and inflation data out of China will be watched for indications on the strength of the world’s number-two economy is performing.
Last week, gold prices reversed losses to end higher on Friday as nervousness ahead of the upcoming U.S. presidential election offset a solid U.S. jobs report for October that supported that case for a December rate hike by the Federal Reserve.Recent opinion polls have pointed to an increasingly uncertain outcome for the U.S. presidential election, rattling global financial markets and pressuring the dollar lower.
The greenback remained on the defensive despite data showing that the U.S. economy continued to create jobs at a steady pace in October, although at a slightly slower rate than forecast.Federal Reserve Vice Chairman Stanley Fischer said Friday that the labor market continues to recover robustly despite a variety of negative shocks and now verges on full employment, aiding strong dollar sentiment.
The U.S. economy added 161,000 payroll jobs in October for an average increase of 181,000 per month this year, slower than last year’s 229,000 pace, but enough to keep the unemployment rate at around 5%.“The labor market has, by and large, had a pretty good year,” Fischer said in a speech prepared for the International Monetary Fund’s annual research conference.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Investors are currently pricing in a 66.8% chance of a rate hike at the Fed’s December meeting; according to federal funds futures tracked Investing.com’s Fed Rate Monitor Tool.But analysts have warned that the U.S. central bank could hold off on hiking rates if the election outcome sparks market volatility.
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