Gold prices turned lower on Tuesday as the dollar and global equity markets firmed with investors growing more convinced that Democratic candidate Hillary Clinton could win the U.S. presidential election. At the end of a bruising political campaign, the Reuters/Ipsos States of the Nation poll gave Clinton a 90 percent chance of defeating Republican Donald Trump and said she was on track to win 303 Electoral College votes, more than the 270 needed, with Trump likely to get 235. If there is any consistency between how the gold market is trading and what polls are saying, the gold market is leaning towards Clinton winning, which means that a downward move will likely be less significant than an upward move in the case of a Trump victory. A win by Trump, a businessman who has never held public office, would create more uncertainty in the market and that could raise gold's appeal as a hedge against risk. On the technical front, support can still be found around the 200-day moving average of $1,270 an ounce. We maintain our bearish view on gold. But its losses will be limited.
Silver remained rangebound within the range between $18 to $18.50. The U.S. presidential election will dominate the market in near term. Under current circumstances, financial market is expected to remain stable as Clinton is more likely to win in the election, boosting risk appetite and supporting the white metal. Investors are recommended to short silver if the spread between gold and silver narrowed down.

 
Dealing Room, ICBC Beijing Branch
Cheng Yu

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