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Gold extends rally amid U.S. election jitters; Fed decision ahead

Published 02/11/2016, 07:56
Updated 02/11/2016, 08:00
© Reuters.  Gold futures rise to fresh 1-month high
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Investing.com - Gold prices extended overnight gains during Europe's session on Wednesday, climbing to a fresh one-month high as demand for safe-haven assets was boosted amid growing jitters over the U.S. presidential election.

Gold for December delivery on the Comex division of the New York Mercantile Exchange touched an intraday peak of $1,295.85 a troy ounce, the most since October 4. It was last at $1,295.35 by 3:55AM ET (07:55GMT), up $7.40, or 0.58%.

On Tuesday, prices of the yellow metal surged $14.90, or 1.17%, as investors were rattled by signs the U.S. presidential election race was tightening less than a week before the November 8 vote.

Two separate polls showed Donald Trump moving slightly ahead of Hillary Clinton, as enthusiasm for the Democratic candidate has ebbed since the renewal of the FBI’s email investigation late last week.

The market is also keeping an eye on the outcome of the Federal Reserve's policy meeting later in the day. The U.S. central bank is not expected to raise interest rates, but could signal its intent to hike in December amid signs the economy is picking up steam.

Traders are currently pricing in a less than 10% chance of a rate hike today, according to Investing.com's Fed Rate Monitor Tool. For December, odds stood at around 70%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.2% at 97.58 early Wednesday, well of last week's nine-month high of 99.09.

Also on the Comex, silver futures for December delivery rose 2.9 cents, or 0.16%, to $18.45 a troy ounce during morning hours in London, while copper futures dipped 1.6 cents, or 0.72%, to $2.213 a pound.

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