Gold slips on firm dollar; US election concerns seen lifting demand

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BENGALURU: Gold eased on Sunday as the dollar firmed ahead of U.S. jobs data, but looked set for a weekly gain of 2 percent, while investor appetite for the safe-haven asset stayed intact over signs of a close-run U.S. presidential election.
The dollar index, inched up about 0.1 percent to 97.259, but remained captive to uncertainty around the election race.
“We are seeing good buying because of the uncertainty ahead of the U.S. election as people feel that gold is definitely going to go up,” said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.
Spot gold was down 0.3 percent at $1,299.49 an ounce by 0525 GMT, while U.S. gold futures slipped 0.2 percent to $1,300.50 per ounce.
“At present, the real concern is the U.S. presidential election,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.
“Gold is going to move around $1300 levels. The sentiment has changed since the (Clinton’s) server issue came up. The speculative interest has changed from rate hike to U.S. presidential elections,” he added.
The Fed kept interest rates unchanged after a two-day policy meeting earlier in the week and signalled it could ike rates in December.
Ever since the FBI announced investigation into Democratic candidate Hillary Clinton’s emails, uncertainty over the outcome of the election has peaked, with markets not ruling out the possibility of Republican Donald Trump bagging a victory.
Clinton’s supporters nervously eyed opinion polls showing the Democrat with a tenuous lead over Trump on Thursday as the White House candidates raced through vital battleground states in a late search for votes.
U.S. non-farm payrolls data is due later in the day and will be watched by investors for cues on an anticipated December interest rate hike by the Federal Reserve.
“Markets will be definitely looking at the non-farm payrolls data, but the main focus for people is going to be the elections on Tuesday,” Lan of GoldSilver Central added.
Spot gold may revisit its Nov. 3 low of $1,285.01 per ounce, as its correction from the Nov. 2 high of $1,287 has nt completed, according to Reuters technical analyst Wang Tao.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.47 percent to 949.69 tonnes on Thursday.