By Anil Mathews

Hedge funds are piling into the perceived safety of bullion, increasing their wagers that the metal will rally for a second straight week.

Market Daily & Weekly

Note: Indications only, open and closing prices are bids; Data source: Bloomberg; Times as per Dubai

Fundamentals and News

Hedge Funds Are Hiding Out in Gold as Election Fears Grip Market

To understand how fearful investors are of all the wild cards in Tuesday’s U.S. presidential election, just take a look at the gold market.

Hedge funds are piling into the perceived safety of bullion, increasing their wagers that the metal will rally for a second straight week, U.S. government data showed Friday. That marked the first consecutive gain since July as money managers pushed their holdings to a one-month high.

Anxiety has gripped the financial markets with opinion polls signaling a tightening race between Democrat Hillary Clinton and Republican Donald Trump, who showed signs of strength with early votes cast in Iowa and Ohio. Wary investors pushed the S&P 500 Index of equities to its longest slump since 1980, fleeing to assets such as gold that are deemed less risky. Bullion futures in New York have risen for four straight weeks.

“Investors are squaring their books going into elections to make sure they’re hedging their risk,” said Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel, NicolausCo., which oversees about $172 billion. “When you have more volatility within the financial system, then investors gravitate towards safe haven asset classes.”

With one day to go until Election Day in the U.S., investors seem less certain of the outcome than prediction-market gamblers and polling aggregators.

Options bets on where the S&P 500 Index will be the day after the electionsuggest Hillary Clinton has a 63 percent chance of becoming president, Janus Capital Group Inc. said in an e-mail on Saturday. Most polling-aggregation forecasts put her odds of beating Donald Trump at more than 80 percent, withFiveThirtyEight an outlier at 65 percent. On websites that take wagers on the winner, Clinton’s lowest odds are in the Iowa Electronic Markets, where they climbed this weekend to over 70 percent, thanks in part to Sunday’s news that the Federal Bureau of Investigation won’t revisit its July decision against seeking criminal charges related to her e-mail practices.

The analysis by Janus is consistent with how the financial markets behaved on Friday: Traders increased hedges against a stunning upset by Trump even as Clinton’s slide in the polls eased.

Data Forthcoming Releases

Courtesy: http://kalotipm.com.sg/kaloti-market-report-7th-november-2016