Gold steadied after the steepest slump in a month as the U.S. presidential election got underway, with Goldman Sachs Group Inc. saying Democrat Hillary Clinton is more likely to win than Donald Trump.
Bullion for immediate delivery added 0.2 percent at $1,284.59 an ounce at 11:29 a.m. in London, according to Bloomberg generic pricing. On Monday, prices sank 1.8 percent, the most since Oct. 4, on speculation that Clinton’s odds have improved.
Bullion has swung in recent weeks as investors tracked the U.S. campaign. A win for Trump is largely seen as bullish for gold because his promises to renegotiate trade deals and curb immigration may introduce geopolitical instability.
“Our economists believe that there is a significant polling deficit for Mr. Trump to overcome in a large number of states, particularly in contrast to Secretary Clinton,” Goldman analysts including Max Layton said in a report received on Tuesday. The Democrat “simply needs to win one of the very competitive states she currently leads -- Colorado, Nevada, or North Carolina -- and maintain her sizable lead in the others to win.”
Gold slid on Monday after the Federal Bureau of Investigation absolved Clinton of committing a crime in her handling of e-mails, sending the dollar higher. Goldman Sachs stuck with its three- and six-month estimate for $1,280 an ounce, and forecast prices dropping to $1,250 in 12 months.
The final Bloomberg Politics national poll before Tuesday’s election put the Democratic candidate ahead of Trump by three percentage points.
Gold futures may fall to $1,250 within a week should Clinton prevail, while a victory for Trump could buoy bullion to $1,395, according to more than 20 analysts and traders surveyed by Bloomberg. Election jitters have jump-started volatility in bullion, with a gauge of price swings over the past 15 days rebounding from a two-year low.
Bullion of 99.99 percent purity dropped as much as 0.5 percent to 280.1 yuan a gram ($1,285.08 an ounce) on the Shanghai Gold Exchange.
On global markets, spot silver rose 1 percent. Platinum added 0.8 percent, while palladium fell 0.2 percent.
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