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Gold holds above $1,300 after Fed decision, U.S. election jitters in focus

Published 11/03/2016, 04:02 AM
Updated 11/03/2016, 04:02 AM
© Reuters.  Gold holds above $1,300

© Reuters. Gold holds above $1,300

Investing.com - Gold prices held near the prior session's one-month high during European hours on Thursday, as the Federal Reserve signaled it could hike interest rates in December, while the uncertain U.S. election continued to cloud the market's outlook.

Gold for December delivery on the Comex division of the New York Mercantile Exchange was down $5.55, or 0.42%, to $1,302.65 a troy ounce by 4:00AM ET (08:00GMT), after rallying $20.20, or 1.57%, a day earlier.

The Fed kept interest rates unchanged on Wednesday in its last policy decision before the U.S. election, but signaled it could hike in December as the economy gathers momentum and inflation picks up.

Traders were pricing in around a 60% chance of a rate hike next month, according to Investing.com's Fed Rate Monitor Tool.

On Friday, the key U.S. nonfarm payrolls report will be released, and could reinforce or undermine those hike bets.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.3% at 97.12 early Thursday, after falling to 97.08 earlier, the weakest level since October 11.

Prices of the yellow metal touched $1,309.30 on Wednesday, the most since October 4, as investors were rattled by signs the U.S. presidential election race was tightening less than a week before the November 8 vote.

Enthusiasm for Hillary Clinton has ebbed since the renewal of the FBI’s email investigation late last week.

Also on the Comex, silver futures for December delivery shed 20.1 cents, or 1.08%, to $18.49 a troy ounce during morning hours in London, while copper futures dipped 0.8 cents, or 0.34%, to $2.224 a pound.

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