Thursday October 20, 2016 10:35

(Kitco News) - Is gold’s momentum really dependent on the victor of the U.S. presidential election?

According to RBC Capital Markets commodity strategist Chris Louney, a correlation has developed between Republican presidential candidate Donald Trump and gold.

Speaking with CNBC’s Futures Now, Louney said in an interview that "gold reacts when Trump's chances of winning rise above 40 percent or below 20 percent in the mainstream media.”

Over first seven months of the year, gold really “glittered,” he said, with uncertainty surrounding monetary policy and Brexit fears. The metal has since come under pressure, although regaining some lost ground this week. Gold prices are up 1.5 percent after three weeks of losses for the metal. The metal closed above its 200-day moving average of $1,267 on Wednesday.

"We've seen this peak-to-trough matching, but only on those limited bands when his chances really fluctuate," he said on Tuesday. CNBC reported that in early August, when the precious metal was trading near $1,400 an ounce, Trump's chances of victory were at 50 percent. And, in late September, when Trump's chances were at 46 percent, gold hit a high of $1,339. Meanwhile, CNBC said that Trump’s fall below a 20 percent chance of winning came alongside a 7 percent drop for gold.

"We note that gold prices receded by approximately $10 per ounce following the first U.S. presidential debate and were flat following the second debate, in line with the respective mainstream media reviews of the two debates," Louney said.

Following the final debate between Trump and Democratic candidate Hillary Clinton, December Comex gold was last up $5.70 an ounce at $1,262.60 an ounce. December Comex silver was last up $0.201 at $17.68 an ounce.