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With the presidential election just a few days away and many investors wondering how the election may impact gold and silver, the latest jobs report on Friday showed that more jobs than expected entered the economy in October, pushing gold to close at $1685. “Better-than-expected numbers reduced the risk demand for gold, and a drop below $1,700 an ounce triggered sell-stops and momentum selling,” said James Steel, metals analyst at HSBC. Even with those numbers, the yellow metal continues to average unprecedented highs. Silver, however, is looking like a steal, with global markets bullish on the white metal. Superstorm Sandy’s wake of destruction may have done little compared to the anticipated market frenzy before the US election: with opinion polls showing a dead heat between Obama and Romney, analysts are expecting a surge in trading after the election. Does emotional trading commence on the 7th of November?

Precious metals on the move

Spot price of each metal at week’s end, and change over previous Friday:

  • Gold: $1,685, down 1.8%
  • Silver: $31.92, up 0.8%
  • Platinum: $1,552, down 0.6%
  • Palladium: $608, up 0.7%

In the news

Forget the election; has the world accidentally declared war on itself?
“Once the bailout bubble collapses – and it will – you are looking at the next great war. You are already looking at ‘currency wars’ and ‘trade wars’. The US has devalued, Russia and China have ditched the dollar and inflation has begun due to the devaluations. The currencies are all buying less and less – and these things lead to real wars.” — Gerald Celente, famed publisher of the Trends Research Institute Journal (link)

Election winner gets… a mess, a delightful slideshow for the cliff-diving enthusiasts
“If you watch cable news on any station the day after the election, all you’re going to hear is ‘countdown to the fiscal cliff.'” — Erskine Bowles (link)

Why do the Germans want their gold back?
“German sentiment is hardening against the single currency with each month that passes. After all, what is a whole vault full of gold in the basement of your central bank good for exactly? Starting a new currency, of course. And, er … that’s about it.” — Matthew Lynn (link)

In Hong Kong, gold business cards make bribery dignified
“Imagine you’re a businessman in Xian who needs some silly permit, and you have to grease a local bureaucrat. It would be untoward to deliver a suitcase full of cash… So now what business people seem to be doing is minting solid gold business cards. When they want to bribe an official, they schedule a meeting, and hand them a business card or six. It’s so innocuous, nobody really notices.” — Simon Black of Sovereign Man (link)

Spotlight on Silver

In China, silver on a bull run as economy slackens
“I’m bullish on silver, so I personally have stockpiled 3 tons of it at home.” — Yang Guohui, president at Hunan Yishui Rare & Precious Metals Recycling Co. (link)

Special election gold survey

(link)

  • Bullish: 18
  • Bearish: 5
  • Hold: 4

The week ahead

  • Gold wins no matter who wins on Tuesday
  • More liquidation of gold prior to election?
  • Liber fines and bans continue to be issued
  • Platinum the new gold in India? Bargain basement prices lead to buying spree
  • Silver set to break out as Chinese demand skyrockets