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Gold down ahead of election

Xinhua, November 8, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Monday after the U.S. Federal Bureau of Investigation (FBI) cleared U.S. presidential candidate Hillary Clinton of any criminal activity related to her emails.

The most active gold contract for December delivery fell 25.1 U.S. dollars, or 1.92 percent, to settle at 1,279.40 dollars per ounce.

All focus is on the U.S. election but investors' fears eased over the possibility of U.S. presidential candidate Donald Trump winning the U.S. election. Many believe that if elected, Trump will renegotiate or eliminate U.S. trade deals, drastically destabilizing the market, which incorporates figures those trade deals into its trading algorithms and valuation models.

Many analysts believe that if those deals were suddenly torn up, those models would no longer be reliable and the market would adjust as a result.

Up until the final week before the election, analysts believed that former U.S. Secretary of State Hillary Clinton was the likeliest to be elected. However in recent days that confidence was shaken as the U.S. FBI announced it had discovered new evidence in a recent investigation of her emails account, destabilizing the market and driving gold up.

Gold was put under further pressure as the U.S. Dollar Index rose by 0.37 percent to 97.71 as of 1930 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

The U.S. Dow Jones Industrial Average rose by 349 points, or 1.95 as of 1930 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Silver for December delivery fell 22 cents, or 1.20 percent, to close at 18.151 dollars per ounce. Platinum for January delivery dropped 3.1 dollars, or 0.31 percent, to close at 1,001.40 dollars per ounce. Enditem