Nov. 6 (Bloomberg) -- Gold jumped the most in seven weeks, tracking gains in equities and commodities, on speculation that the U.S. will take additional measures to spur economic growth, regardless of the winner in today’s presidential election.
The Standard & Poor’s GSCI Spot Index of 24 commodities advanced the most in a month, led by energy and metals, while the Dow Jones Industrial Average gained. The dollar fell. Whether President Barack Obama or Republican challenger Mitt Romney wins today, the next president will need to address a so-called fiscal cliff of more than $600 billion in tax increases and spending cuts that take effect in January unless Congress can reach a budget compromise.
“The slowdown concerns remain, and the fiscal cliff is so huge that there is no quick solution,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Whoever comes to power cannot fix the problems immediately.”
Gold futures for December delivery rose 1.9 percent to settle at $1,715 an ounce at 1:53 p.m. on the Comex in New York, the biggest gain for a most-active contract since Sept. 13. Prices are up 9.5 percent this year, heading for a 12th straight annual gain as the Federal Reserve keeps interest rates at record lows to spur growth.
UBS AG’s Edel Tully said Romney’s election may lead to a united government and stronger dollar, hurting gold. Bullion’s rally may be at risk if Romney wins as he may replace Federal Reserve Chairman Ben Bernanke at the end of his term and easing could end earlier than expected, Francisco Blanch, commodities research head at Bank of America Merrill Lynch, said yesterday.
The national polls show a close race between Obama and Romney, and the candidate taking the oath of office at the U.S. Capitol on Jan. 21, 2013, will be the one who garners at least 270 electoral votes. The presidential election could be effectively settled shortly after 8 p.m. New York time.
“The wait is over, and we are seeing a relief rally across the board,” Carlos Perez-Santalla, a broker at PVM Futures Inc. in Hoboken, New Jersey, said in a telephone interview. “The monetary policies that either will announce will help push gold higher.”
Prices also rallied today as the dollar declined, traders said. The dollar fell as much as 0.2 percent against a basket of currencies, heading for the biggest drop in a week.
Silver futures for December delivery advanced 2.9 percent to close at $32.034 an ounce in New York, the biggest increase since Sept. 13.
On the New York Mercantile Exchange, platinum futures for January delivery rose 1 percent to close at $1,558.30 an ounce. Palladium futures for December delivery gained 2.8 percent to $620.15 an ounce, the most since Aug 23.
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