Gold steadied in Asian trade on Wednesday as early state exit polls in the U.S. presidential election showed wins for both Republican Donald Trump and Democrat Hillary Clinton.
Elsewhere, equities were generally firmer, but the dollar slipped on the yen and euro as investors hedged against the risk of a shock win by Trump. Clinton led Trump, 44 percent to 39 percent, in the last Reuters/Ipsos national tracking poll before election day. A Reuters/Ipsos States of the Nation poll gave her a 90 percent chance of defeating Trump and becoming the first woman elected U.S. president.
A potential Clinton victory would sharpen investor appetite for risky assets and reduce the draw of safe-havens such as gold. Spot gold was flat at $1,274.90 an ounce by 0027 GMT. Bullion has lost nearly 3 percent since touching a one-month high above $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.
Varathan said the reaction in the gold market to the outcome of the U.S. 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.
U.S. gold for December delivery was also flat at $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.”