Friday, November 4, 2016

Gold In Best Run Since Brexit On Concern Trump May Be Triumphant

Citigroup says victory for Republican may spur rally to $1,400; Bullion heads for third weekly climb as investors seek havens.

By Jasmine Ng
November 4, 2016

Gold is heading for the longest run of weekly gains since the U.K.’s Brexit vote roiled financial markets on rising concern that Republican candidate Donald Trump may prevail over Hillary Clinton in next week’s U.S. presidential election, buoying haven demand.

Bullion for immediate delivery is poised for a third weekly climb, the best run since the period to July 8, and hit $1,308.02 an ounce on Wednesday, the highest in about a month, according to Bloomberg generic pricing. After rising for the past six sessions, it was steady at $1,302.70 at 9:57 a.m. in Singapore.

Investors are seeking to navigate the crosscurrents thrown up by next week’s vote, with a possible victory for Trump seen lifting gold to as much as $1,400, according to Citigroup Inc. and UBS Group AG. A New York Times/CBS poll found Clinton ahead 45 percent to 42 percent among likely voters, tighter than her nine-point lead in the same poll in mid-October, while a separate poll by Washington Post/ABC News showed her losing ground to Trump since last week.

“Investors rotated to safe-haven assets after polls tightened and reduced the likelihood of a Clinton victory,” Citigroup analysts including Ed Morse said in a report received on Friday. “As the election keeps driving gold prices in the short-term, we expect gold volatility to remain elevated.”

U.S. monetary policy is also in focus Friday, with payrolls data likely to color speculation over the timing of interest-rate increases. Federal Reserve officials said this week they need only “some” further evidence that employment and inflation are on track toward their goals in order to hike, after leaving rates unchanged for the seventh consecutive meeting.

After the U.K.’s unexpected vote to quit the European Union, bullion rallied as much as $101.70 on June 24, and prices went to complete a run of six weekly gains. In the run-up to the U.S. poll, holdings in gold-backed exchange-traded funds rose 0.2 percent in the first four days of this week.

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