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Gold steady in Asian trade ahead of US election outcome

Wednesday, November 9, 2016 - 08:57

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Gold steadied in Asian trade on Wednesday as early state exit polls in the US presidential election showed wins for both Republican Donald Trump and Democrat Hillary Clinton.

[MANILA] Gold steadied in Asian trade on Wednesday as early state exit polls in the US presidential election showed wins for both Republican Donald Trump and Democrat Hillary Clinton.

Elsewhere, equities were generally firmer, but the US dollar slipped on the yen and euro as investors hedged against the risk of a shock win by Mr Trump.

Mrs Clinton led Mr Trump, 44 per cent to 39 per cent, in the last Reuters/Ipsos national tracking poll before election day. A Reuters/Ipsos States of the Nation poll gave her a 90 per cent chance of defeating Mr Trump and becoming the first woman elected US president.

A potential Clinton victory would sharpen investor appetite for risky assets and reduce the draw of safe-havens such as gold.

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Spot gold was flat at US$1,274.90 an ounce by 0027 GMT. Bullion has lost nearly 3 per cent since touching a one-month high above US$1,300 on Nov 2.

"If Clinton does win, this is not going to be a major surprise so the magnitude of adjustment that we would see coming through in gold may not be that large," said Vishnu Varathan, senior economist at Mizuho Bank.

Mr Varathan said the reaction in the gold market to the outcome of the US vote may be more limited compared to its surge when Britain voted to leave the European Union in June.

"In this case whether it's a Clinton win or a Trump win, at this point beyond just unravelling some of the very tail-risk events, there's really nothing left in the tank to aggressively trade gold," he said.

US gold for December delivery was also flat at US$1,275.20 an ounce.

"In early trades we see a bit of dip in gold prices, but it is not as big as we have seen in the previous few days, which shows a Clinton win has been largely priced in by the markets," said Vyanne Lai, analyst at National Australia Bank.

"Early signs do suggest that a Clinton win is highly likely and prices would then track lower."

REUTERS

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