Gold tumbles with haven assets as FBI hands Clinton a boost

[SINGAPORE] Gold retreated, joining a slide in other haven assets, after the Federal Bureau of Investigation said it maintains the view that Hillary Clinton's handling of her e-mails wasn't a crime, boosting the Democrat in the final stretch of the US presidential election campaign.

Bullion for immediate delivery lost as much 1.3 per cent to US$1,288.11 an ounce and was at US$1,294.48 at 9:18am in Singapore, according to Bloomberg generic pricing, as the US dollar rose for the first time in seven days. Last week, the metal surged 2.3 per cent amid concern Republican Donald Trump may capture the White House, with Citigroup Inc seeing a rally to US$1,400 if he won.

Bullion prices have traded in recent weeks as a barometer of Mr Trump's chances of winning the contest even as investors also track US data to gauge the likelihood of higher interest rates.

The FBI is sticking to its conclusion that Mrs Clinton's handling of her e-mails as secretary of state wasn't a crime, the bureau's director, James Comey, said in a letter. On Oct 28, Mr Comey had said the FBI was examining new e-mails, roiling the election race and lifting gold.

"It looks like the market is overwhelmingly pricing in a Clinton victory," Vyanne Lai, an economist at National Australia Bank Ltd in Melbourne, said by phone.

"The US dollar has jumped, which in turn is weighing on gold prices. You can see there's some sort of a relief rally in the equity market as well."

Gold fell in Asia on Monday together with the yen and the Swiss franc, while equities and equity futures rose, as investors recalibrated their expectations of the race after the FBI's second intervention. US electors head to the polls on Tuesday, although millions of early votes have already been cast.

Adding to the headwinds for bullion, the Labor Department on Friday reported that the unemployment rate fell while hourly earnings edged higher, boosting the outlook for a rate rise.

Federal Reserve Bank of Atlanta President Dennis Lockhart signalled the central bank is on track to raise rates next month, provided nothing intervenes to give policy makers pause.

As polls last week showed a dwindling lead for Mrs Clinton, hedge funds piled into the perceived safety of bullion, increasing wagers that the metal would rally, US government data showed on Friday. The gold net-long position jumped 14 per cent to 172,532 futures and options contracts in the week to Nov 1.

BLOOMBERG