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Gold Inches Up From Two-Month Low, Eyes Turn To U.S. Elections Print E-mail
Analysis | Commodity Market Commentaries | Written by ICN.com | Mon Nov 05 12 04:23 ET

Precious-Gold inched up on Monday trading from two-month low touched on Friday after the release of better-than-estimated nonfarm payrolls.

The shiny metal is still trading around $1678.67 an ounce after hitting a high of $1683.94 and a low of $1675.84, where $1680 levels remain critical in determining direction.

On Friday, the shiny metal plunged to two-month low of $1674.75, dropping 2.19% during the session to experience the fourth straight weekly decline and the longest drop since September 2011 after the U.S. jobs report showed a rise in nonfarm payrolls to 184,000 last month, exceeding both a revised of 148,000 and median estimates of 125,000, damping demand on the metal as an inflation hedge while giving a lift to the dollar as it will avoid an oversupply.

On the other hand, unemployment rate surged to 7.9% in October from 7.8% a month before on the back of workers restarting their job hunts

With the improvement seen in hiring, signs of recovery in the labor markets are increasing, where the amelioration in other data added to hopes the world`s no.1 economy is on the right track of recovery, therefore the Fed will not need to add further stimulus, yet data in the coming period will be affected by Sandy hurricane.

Later in the day, U.S. ISM non-manufacturing will show an ease in expansion to 54.5 in October from 55.1 in September.

Now, eyes will focus on U.S. elections as markets are eager to know the winner in the Presidency battle as the win of Obama will probably not cause turbulence in markets as policy makers will continue with their policies, yet fears of the fiscal cliff would continue; on the flip side, if Romney wins, there will be a change in polices that will affect movements in markets.

In the FX market, the dollar is currently hovering near the day`s opening of 80.65 against a basket of major currencies, as depicted by the dollar index, after it rose to a high of 80.67 and touched a low of 80.50,

The greenback advanced to two-month high on Friday after the upbeat NFP report, to put pressure on dollar-denominated commodities.

Crude oil for December`s delivery is currently trading little bit higher around $84.74 a barrel from the day`s opening of $84.68.

Among other precious metals, sliver plummeted to $30.78 from the day`s opening of $30.86, platinum settled at $1541.50 and palladium retreated to $597.60 from $602.03.


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