November 6, 2012
Comex gold prices ended the U.S. day session sharply higher and nearer the daily high Tuesday, and pushed well above the key $1,700.00 level, on strong short covering and bargain-hunting buying interest. One big uncertainty that has been overhanging the market place for months will very likely be resolved in the next 24 hours: Who will be the next U.S. president. The stock and commodity markets rallied Tuesday on notions this particular matter of uncertainty will be resolved very soon. A weaker U.S. dollar index and sharply higher crude oil prices also supported the precious metals Tuesday. December gold last traded up $31.30 at $1,714.50 an ounce. Spot gold was last quoted up $29.80 at $1,715.25. December Comex silver last traded up $0.927 at $32.055 an ounce.
Tuesday started out early as a bit of a “risk-on” trading day in the market place, and saw that risk appetite build as the trading session wore on. Many precious metals traders are wondering how the election results will impact the metals in the coming weeks or months. There is a general feeling that President Obama getting re-elected would be bullish for the raw commodity sector because of the likelihood of easy U.S. monetary policy being kept in place. A victory by Mitt Romney is seen by many as a bearish development for the commodity markets due to his proclamations that easy money policy in the U.S. needs to be curtailed. It could well be, and it is my bias, that the metals and most other markets produce no major reactions to the actual U.S. election results. Today’s rallies in many markets corroborates the aforementioned notion.
In overnight news, European stocks were up slightly despite some fresh downbeat economic news coming out of the European Union Tuesday. European market watchers are now looking to a Greek parliamentary vote on fresh austerity measures which is scheduled for Wednesday. The European Central Bank holds its monthly meeting on Thursday. There is a general leadership conference in China later this week, at which time new leaders in China will be selected. Australia’s central bank also met Tuesday to discuss its monetary policy and made no major changes. Many thought the Australian central bank would ease monetary policy.