Gold Jumps 1.2% on Election Jitters

Market update courtesy of American Gold Exchange – By Bill Musgrave.

Gold jumped 1.2% to a four-week high of $1,288 as jitters about the U.S. presidential election undermined stocks and the dollar, boosting demand for safe-haven assets.
New polls showed a narrowing of the presidential race, with Donald Trump closing in on Hillary Clinton and even leading slightly in the latest ABC/Washington Post tracking poll.

The apparent shift in momentum comes after FBI Director James Comey sent a controversial letter to Congress on Friday declaring the discovery of new emails potentially related to Clinton’s use of a private server while Secretary of State.

Wall Street fell on the news, with the S&P 500 dropping 0.9% to a four-month low, as traders become increasingly anxious about the race. Markets have largely settled on a Clinton victory because of her recent leads in polling. A Trump upset would rattle the markets, in part because his policies are largely unclear beyond his anti-globalist, protectionist rhetoric.

The dollar also fell, losing 0.6% against major rivals, as traders weighed the possible effects of a Trump presidency on currency markets. A falling dollar boosts gold and other commodities denominated in it for international trade by making them less expensive overseas.

Soft U.S. data also weighed on the dollar. Construction spending fell in September and posted its first year-over-year decline in more than five years. The ISM reported national factory activity ticked up 0.4% but remained slightly above contraction at 51.9. The Atlanta Fed downgraded its forecast for Q4 real GDP growth to 2.3% from 2.7% yesterday.

The other precious metals also gained, with silver surging 3.5% while platinum and palladium rose 2% and 2.6%, respectively.

At the Comex close: December gold jumped $14.90 to $1,288; December silver surged 62 cents to $18.42; January platinum rose $19.30 to $997.90; and December palladium climbed $16.10 to $634.10 an ounce.