Gold steadied on Friday, heading for its biggest weekly rise since mid-September as jitters over next week’s U.S. election offset a solid payrolls report that shored up expectations for a U.S. interest rate hike next month.
Global equity markets slipped amid investor concerns about the outcome of Tuesday’s U.S. presidential election, while the dollar eased, despite a solid U.S. jobs report that supported expectations for a Federal Reserve rate hike next month.
Spot gold was down 0.08 percent at $1,302.22 an ounce immediate wake of the payrolls data. U.S. gold futures for December delivery settled up 0.1 percent at $1,304.50.
“If (Republican Donald) Trump wins, and he could win, I don’t think it’s going to be the shock that some people are making it out that it could be,” said Bob Haberkorn, senior market strategist for RJO Futures in Chicago. “If he does win, initial reaction will be gold will pop. I don’t think it will be like Brexit.”
An initial dip in gold was quickly bought into as investors remained on edge ahead of Tuesday’s vote.
“A Trump win would signal a positive direction for gold, so that’s the bigger thing to watch,” ING’s head of commodity strategy Hamza Khan said.
The dollar index was on track for its biggest weekly drop since July after the Federal Bureau of Investigation said last week it was reopening a probe of Democrat presidential candidate Hillary Clinton’s use of a private email server while she served as secretary of State.
“Gold implied volatility rallied sharply across the curve over the past week, as investors rotated to safe-haven assets after polls tightened,” Citi said in a note. “As the election keeps driving gold prices in the short-term, we expect gold vol to remain elevated into Election Day.”
Gold prices in India swung to a discount this week as a rally in prices dampened retail demand, while buying in leading consumer China rose due to safe-haven buying. Investor appetite looked firm, with the world’s largest gold exchange-traded fund announcing a 4.4-tonne rise in its holdings on Thursday.
Silver was up 0.2 percent at $18.36 an ounce, on track to post its third consecutive weekly rise. Platinum was up 0.3 percent at $995.74, while palladium was 1.4 percent higher at $624.40, on track for its first positive weekly performance in five.