Gold price dips as dollar bounces; focus on U.S. election, Fed

London (Oct 31)  Gold edged lower on Monday as the dollar rebounded after recent losses, though concerns over the outlook for the U.S. election and Federal Reserve policy kept the metal pinned near the previous session's three-week high.

The metal hit its highest since Oct. 4 on Friday after the Federal Bureau of Investigation announced another investigation into Democratic presidential candidate Hillary Clinton's use of a personal email server while she was secretary of state.
 
That shook up markets that had priced in a Clinton victory over Republican Donald Trump, prompting losses in stocks and the
dollar. A rebound in the U.S. currency on Monday pulled gold off last week's highs.
    Spot gold was down 0.2 percent at $1,273.68 an ounce
at 1035 GMT. U.S. gold futures for December delivery were
down $2.30 at $1,274.75. Spot prices remain within $15 of
Friday's high, however.
    "People had been presuming the election was a done deal for
Clinton," said Natixis analyst Bernard Dahdah. "If this means
her lead is reduced, the gold market could benefit from that
uncertainty."
    October U.S. payrolls data on Friday will be of great
interest this week, he said, while markets are looking for
pointers on policy when the Fed meets on Tuesday and Wednesday.
"We're not expecting a rate hike in November, but we'll be
looking at the language," Dahdah said. "That could be a mover."
    While hardly anyone expects Fed Chair Janet Yellen and other
Fed policymakers to move only a week before the Nov. 8 election,
they appear to have left themselves the December meeting to
deliver a rate rise in 2016.
    Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion while boosting the dollar, in which it is priced.
    Speculators raised their net long positions in COMEX gold
for the first time in four weeks in the week to Oct. 25 and cut
it slightly in silver, U.S. Commodity Futures Trading Commission
data showed on Friday.
    Among other precious metals, silver was 0.3 percent
higher at $17.79 an ounce but still on track to post a monthly
decline.
    Platinum was down 0.1 percent at $978 and set to
record its third consecutive monthly decline, while palladium
, down 0.4 percent at $616.80, was heading for its biggest
monthly drop since November, down 14 percent.
    The current price weakness in platinum group metals is
driven by speculaion wih no justification from fundamentals,
Commerzbank said in a note.
    "The downward pressure on palladium from ETF
(exchange-traded funds) sales appears to be easing. We therefore
continue to see palladium at $625 per troy ounce at year's end."

Source: Reuters