Gold Slides As Dollar, Equities Jump On Clinton Boost
London: Gold prices tumbled on Monday as the dollar and stocks rallied on news Hillary Clinton would not face criminal charges related to her use of a private email server, boosting her chances of winning the US presidential election.
Spot gold was down 1.2 per cent at $1,288.21 an ounce by 1018 GMT (3:48 p.m. in India) after hitting a low of $1,283.12 earlier in the session. US gold futures fell 1.2 per cent to $1,288.8.
"It's risk on after the FBI said it won't be taking the email saga any further," said Warren Patterson, commodity strategist at ING. "Polls are showing Clinton in the lead."
The FBI said on Sunday it stood by its earlier finding that no criminal charges were warranted against Democratic presidential candidate Clinton.
Gold gained more than two per cent last week on uncertainty related partly to the FBI saying on October 28 it was looking into new emails that may be connected to Ms Clinton.
The election is on Tuesday and the final result will be known on Wednesday.
"If Clinton wins there's going to be a further correction in prices and gold may even go down to $1,250," said Joshua Rotbart, managing partner at Hong Kong-based bullion services provider J. Rotbart & Co.
The latest Washington Post-ABC and final NBC-Wall Street Journal polls published on Sunday showed Ms Clinton ahead of Republican rival Donald Trump.
"There is a general perception in the market that if Trump wins gold will go through the roof based on the uncertainty his presidency will usher in, and his protectionist stance," said Amanda van Dyke, fund manager at Peterhouse Asset Management.
Equity markets recorded their biggest gains in weeks on Monday while the VIX index, dubbed the "fear index" of US stocks, posted its biggest one-day fall in more than four months.
A higher US currency makes dollar-denominated gold cheaper for holders of other currencies; a relationship used by funds and short-term traders to generate buy and sell signals.
Also helping the dollar were expectations that the Federal Reserve will raise rates in December, a view reinforced by strong jobs growth in the US.
"The rate rise in December is largely already priced in. I wouldn't be surprised to see a knee-jerk move following a rate rise announcement but it will be brief," said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.
On the technical front, support for gold was seen around the 200-day moving average of $1,278 an ounce and $1,271, the 21-day moving average.
Silver was down 1.1 per cent at $18.19 an ounce while platinum fell 0.6 per cent to $990.00. Palladium was up 0.2 per cent at $625.00 an ounce.
