US Presidential Election: Gold held the steepest slump in a month as Americans prepare to cast their ballots in the US presidential election after a rancorous and divisive campaign, with Goldman Sachs Group Inc. saying that Democrat Hillary Clinton is more likely to win the White House than Donald Trump.
Bullion for immediate delivery traded at $1,284.27 an ounce at 3:02 p.m. in Singapore from $1,281.64, according to Bloomberg generic pricing. On Monday, prices sank 1.8 percent, the most since Oct. 4, on speculation that the odds of a victory for Clinton have improved, hurting haven demand.
“Our economists believe that there is a significant polling deficit for Mr. Trump to overcome in a large number of states, particularly in contrast to Secretary Clinton,” Goldman analysts including Max Layton said in a report on gold received on Tuesday. The Democrat “simply needs to win one of the very competitive states she currently leads — Colorado, Nevada, or North Carolina — and maintain her sizable lead in the others to win.”
Bullion has swung in recent weeks as investors tracked the U.S. campaign, with developments favoring Trump buoying demand for havens, even as the Federal Reserve is seen moving closer to the first rate rise of 2016. The precious metal slid on Monday after the Federal Bureau of Investigation absolved Clinton of committing a crime in her handling of e-mails, sending the dollar higher. Goldman Sachs stuck with its three and six-month outlooks for $1,280 an ounce, and forecast prices dropping to $1,250 in 12 months.
“In recent days, gold prices have been increasingly positively correlated with the implied odds of a Trump victory,” Layton wrote, saying that the digital gold options market looks like a relatively cheap way to be long on a Trump victory. “Having said this, our economists continue to believe that Sec. Clinton victory is more likely.”
The final Bloomberg Politics national poll before Tuesday’s election has put the Democratic candidate ahead of Trump by three percentage points. More than a third of likely voters, 37 percent, say they’ve already voted, and Clinton is leading Trump with that group, 46 percent to 38 percent.
Gold futures may fall to $1,250 within a week should Clinton prevail, while a victory for Trump could buoy bullion to $1,395, according to more than 20 analysts and traders surveyed by Bloomberg. Election jitters have jump-started volatility in bullion, with a gauge of price swings over the past 15 days rebounding from a two-year low.
Bullion of 99.99 percent purity dropped as much as 0.5 percent to 280.1 yuan a gram ($1,285.08 an ounce) on the Shanghai Gold Exchange. On global markets, spot silver rose 1 percent after losing 1.3 percent on Monday. Platinum added 0.8 percent, while palladium fell 0.2 percent.