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Gold soars higher on bullish U.S. Presidential Election day

Published 11/06/2012, 03:20 PM
Updated 11/06/2012, 03:21 PM
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Investing.com - Gold futures surged higher during U.S. afternoon hours Tuesday, as voters in the U.S. went to the polls to decide on the winner of a closely fought Presidential election. 

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,713.75 a troy ounce during U.S. afternoon trade, surging 1.84%.


Gold futures were likely to find support at USD1,646.45 a troy ounce, the low from August 31 and resistance at USD1,727.25, the high from October 31.

Investors became very bullish ahead of the start of voting in the U.S. presidential elections, with opinion polls pointing to a tight race between incumbent President Barack Obama and Republican contender Mitt Romney.

If the election comes down to a thin margin in a swing state such as Ohio, the outcome could be delayed for days or weeks, roiling markets as it did during the extended presidential battle in 2000.

Market players will also be keeping a close eye on congressional races, amid concerns over how lawmakers may deal with the looming U.S. “fiscal cliff”, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1.

Greece was also on investors mind, as the country’s parliament prepared to vote on the latest rounds of austerity measures on Wednesday, which could determine if Athens receives its next tranche of financial aid.

Markets also continued to eye developments surrounding Spain, amid ongoing uncertainty over whether the debt-strapped country is moving closer to formally requesting a bailout from its euro zone partners.

A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.

Investors will then turn their focus to the start of the 18th Chinese Communist Party Congress on Thursday, where a once-in-a-decade leadership change is to take place.

Elsewhere on the Comex, silver for December delivery rose 2.74% to trade at USD31.98a troy ounce, while copper for December delivery added 1.22% to trade at USD3.512 a pound.

Copper traders were looking ahead to a flurry of Chinese economic data later in the week, including reports on inflation and industrial production, to gauge whether the world second largest economy is heading towards a hard or a soft landing.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.




 

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