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Gold drops as investors go long on dollars before U.S. elections
Published Nov 02, 2012 02:23PM ET
Investors brushed off a surprisingly strong October jobs report.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 2.22% at USD1,677.45 a troy ounce, up from a session low of USD1,674.75 and down from a high of USD1,716.95 a troy ounce.
Gold futures were likely to test support at USD1,674.75 a troy ounce, the earlier low, and resistance at USD1,716.95, the earlier high.
U.S. voters go to the polls on Tuesday to elect a new president and surveys do not indicate that either President Barack Obama or his Republican challenger, Mitt Romney, have emerged as a frontrunner headed in.
Investors went long on the dollar on the last Friday before Election Day to ride out electoral uncertainty, which sent gold falling.
Gold and the dollar often trade inversely.
Better-than-expected unemployment figures out of the U.S. did not spark a risk-on rally that would normally have sent gold rising and the dollar falling.
The U.S. Bureau of Labor Statistics revealed early Friday that the U.S. economy added 171,000 jobs in October, beating out analysts' calls for a gain of around 125,000.
The headline unemployment rate rose to 7.9% from 7.8% in September.
Investors snapped up greenback positions on the news after stock markets shrugged off the data.
The economy didn't add enough jobs to reflect a more robust U.S. recovery.
Some analysts have said the economy should create at least 250,000 a month on an ongoing basis before recovery really gains steam.
Elsewhere on the Comex, silver for December delivery was down 4.06% and trading at USD30.940 a troy ounce, while copper for December delivery was down 2.10% and trading at USD3.478 a pound.
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