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Gold edges lower as dollar strengthens

MARKETWATCH 9:56 AM ET 10/31/2016


Gold futures edged lower Monday, with a stronger U.S. dollar setting the tone, although investors continued to pay attention to the latest developments in the U.S. presidential race a little more than a week from Election Day.

Gold futures for December delivery on Comex slipped $2.50, or 0.1%, to $1,274.30 an ounce. December silver rose 2.9 cents, or 0.2%, to $17.825 an ounce.

The U.S. dollar gained ground versus major rivals, leaving the ICE dollar index , a measure of the U.S. unit against a basket of six major rivals, up 0.2% at 98.56. A stronger dollar can weigh on commodities priced in the currency by making them more expensive to users of other currencies.

Gold rose Friday (http://www.marketwatch.com/story/gold-futures-drift-lower-ahead-of-us-gdp-reading-2016-10-28), ending at a more than three-week high, getting a late lift on haven-inspired buying after Federal Bureau of Investigation Director James Comey informed Congress that the agency was reviewing new evidence connected to its probe of Democratic presidential nominee Hillary Clinton's email server.

See:Expect jittery, jumpy markets as FBI email investigation continues to unfold (http://www.marketwatch.com/story/ wobbles-ahead-and-dollar-volatility-what-analysts-expect-after-the-fbi-bombshell-2016-10-31)

(http://www.marketwatch.com/story/wobbles-ahead-and-dollar-volatility-what-analysts-expect-after-the-fbi-bombshell- 2016-10-31)Also read:'Game changer' could derail a traditionally great stretch for stocks (http://www.marketwatch.com/ story/game-changer-could-derail-what-has-traditionally-been-a-great-stretch-for-stocks-2016-10-31)

Recent polls had shown Clinton's lead over Republican nominee Donald Trump narrowing ahead of the latest email news. Analysts say financial markets have largely factored in a Clinton victory.

"There is still just over one week to go until the U.S. election outcome is confirmed and any sudden turns in the tide towards Donald Trump as the winner should in theory provide encouragement for gold to climb higher in valuation," said Jameel Ahmad, vice president of market research at FXTM, in a note.

Federal Reserve policy makers are widely expected to leave rates unchanged when they conclude a two-day meeting on Wednesday, but the statement will be watched for hints of a rate rise in December. Investors overwhelmingly expect a Fed move at that meeting.

Nonfarm payrolls and other labor market data for October is due on Friday and will also be closely watched for signs the Fed is likely to move in December. Higher interest rates tend to be a negative for gold and other assets that don't pay interest.

In other metals trade, January platinum fell $1.20, or 0.1%, to $980.20 an ounce, while December palladium lost 15 cents, or less than 0.1%, to $616.20 an ounce.

High-grade copper for December delivery was unchanged at $2.1935 a pound.

-William Watts; 415-439-6400; [e-mail]


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