Gold, copper down while oil fluctuates as poll race intensifies

New York

GOLD and copper slumped and oil fluctuated as tight races in battleground states in the US election shook traders' initial faith in a decisive outcome, raising the prospect of a prolonged wait for the final result.

A broad selloff across commodities came as the dollar rallied, with the unexpected closeness of the race sparking risk aversion across financial markets and spurring a flight to the safety of the greenback. "The only thing we know for a fact is that the uncertainty will linger for a while after Trump's premature announcement and Supreme Court threat," said Ole Hansen, head of commodities strategy at Saxo Bank A/S. "Most assets classes are selling off while bonds and the dollar have rallied."

The next president will play an integral role in shaping domestic as well as international efforts against climate change, the use of fossil fuels and the pace of energy transition.

"The consequence of a Trump victory could be that the fiscal packages come more quickly, but potentially be of a smaller amount," said Wayne Gordon, executive director for commodities and foreign exchange at UBS Global Wealth Management.

During his presidency, Mr Trump took a hard-line stance against major oil producers Iran and Venezuela by means of crippling sanctions, tightening global supplies. His support for US shale producers helped the nation's output rise to a record, adding more supplies to the global pool.

A victory by Mr Biden could pave the way for the roll-out of more fiscal stimulus that could lift equity and commodity markets - particularly gold, which benefits from a weaker dollar due to money printing - in the near term. It could also lead to stricter regulation of shale drillers and also signal a detente with Iran, which would unleash millions of barrels a day in fresh crude exports. BLOOMBERG