Gold falters as risk appetite grows with Clinton poll

Coking coal rallied 10 percent and nickel led metals higher on Monday as investors piled back into risky assets after the FBI cleared Hillary Clinton for using a private email server, giving her a last-minute boost ahead of the election.

The FBI said on Sunday it stood by its earlier finding that no criminal charges were warranted against the Democratic presidential candidate for using a private email server for government work.

Gold suffered from the revival in risk appetite, falling more than 1 per cent below $1,300 an ounce, as funds sought more exposure in industrial commodities, including this year’s best bet, coal. Oil recovered from multi-week lows.

“One clear implication from all these is that investors are looking to a more market-friendly event. Risk appetite improves when a President Clinton seems to be a more probable scenario than a President Trump,” said Barnabas Gan, analyst at OCBC Bank in Singapore.

A Reuters/Ipsos tracking poll released on Friday put Clinton just 5 percentage points above Republican rival Donald Trump. But major bookmakers and online exchanges are much more confident about a Clinton victory.

Coking coal futures in China led the rally in Asian commodities, and analysts believe the steelmaking raw material will benefit further from a shortage in supply spurred by Beijing’s push to tackle overcapacity.

The most-traded coking coal for January delivery on the Dalian Commodity Exchange soared 10 per cent to hit the exchange-set ceiling of 1,516 yuan ($224) a tonne, a record high.

Coke, made from coking coal and used to make steel, also climbed by its 7 per cent limit to hit 2,001.50 yuan per tonne, its loftiest since March 2013.

Chinese steel futures similarly surged by their 6 per cent ceiling, and raw material iron ore jumped more than 5 per cent at one point.

Even egg futures rose by their 5 per cent limit.

Nickel on the London Metal Exchange climbed more than 5 per cent to stand above $11,000 a tonne, for the first time since August. In Shanghai, nickel jumped 6 per cent to its upside limit of 88,430 yuan a tonne, its strongest since August 2015.

Shanghai tin also went limit up, rising 5 per cent to 147,400 yuan per tonne, and LME tin rose 3 per cent. LME copper jumped 2 per cent to its highest since March.

Both Brent and US crude oil rose more than 1 per cent, rebounding from Friday’s multi-week lows.

Gold dropped 1.2 per cent to a session low of $1,287.73 an ounce, losing its safe-haven allure after the FBI news lifted a cloud over Clinton’s presidential campaign.

The precious metal could slip further if the US Federal Reserve goes ahead with raising interest rates next month as the market expects, analysts say.

With a Clinton win regarded as market-friendly news, “it does give the Fed additional ammunition for a rate hike,” said OCBC’s Gan.