Gold advanced for a fifth straight day, gaining toward $1,300 an ounce, as mounting anxiety ahead of next week’s US election spurs demand for haven assets and investors await the outcome of the year’s penultimate Federal Reserve policy meeting.
The metal for immediate delivery rallied as much as 0.5 percent to $1,294.53 an ounce, the highest intraday level since Oct. 4, and traded at $1,293.43 at 3:29 p.m. in Singapore, according to Bloomberg generic pricing. Prices climbed as global stocks retreated for the sixth time in seven days.
Bullion investors are zeroing in on the US contest, with latest polls showing that Hillary Clinton’s once-dominant lead over Donald Trump is withering, as well as the likely trajectory of US monetary policy. With the Republican candidate seen as a riskier choice for global growth and US policy should he prevail, gold has been in demand. While the Fed isn’t expected to raise rates this meeting, it may signal a hike next month, potentially hurting gold.
“Market nerves increased with polls showing a tightening in the US presidential race and ahead of” the Fed, Australia & New Zealand Banking Group Ltd. said in a note. The US central bank may “tweak its language such that it will be clear to the market that December is ‘live’,” it said.
Bullion declined last month amid expectations that the Fed is poised to raise borrowing costs as the US economy recovers. While the odds of a hike at this week’s meeting, which concludes later Wednesday, are at just 16 percent, they stand at 68 percent for the December gathering.
Investors have been boosting their holdings in bullion-backed exchange-traded funds. The assets rose for a sixth straight month in October, the longest streak since 2009, and extended the increase on Tuesday, climbing by about 2 metric tons to 2,043 tons, data compiled by Bloomberg show.
In China, bullion of 99.99 percent purity added as much as 1 percent to 282.85 yuan a gram ($1,300.48 an ounce) on the Shanghai Gold Exchange, the highest in three weeks. On global markets, spot silver rose 0.2 percent, heading for a fifth day of gains and the longest rising streak since Sept. 6. Platinum fell 0.3 percent, while palladium dropped 0.4 percent.