Gold Steadies after Its Biggest Drop since June on US Employment Data

on Nov 6, 2012
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On November 5, Reuters reported that gold prices steadied after plunging to their lowest level in more than four months following positive US employment data.

**Gold Posts Biggest One-Day Drop since June**
The US government report, which showed that US employers stepped up hiring in October, expectedly boosted the US dollar and weighed on the gold price, with spot gold touching a nine-week low of $1,672.24. Prices slid more than two percent on November 2, with the US employment data reducing pressure on the US Federal Reserve to continue with its third round of quantitative easing, which played a key role in pushing gold to nearly $1,800 an ounce in October.

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“U.S. economic data has improved, and that has removed some of the driver for quantitative easing that we had previously,” noted Ole Hansen, vice president of the Danish Saxo Bank, as quoted by Reuters.
**President Obama Victory Seen as More Supportive of Gold**
!m[Investors Cautious Ahead Of US Election](/uploads/story/725/thumbs/pic1_inline.png)Gold prices, however, continued to remain under pressure on November 5, with investors cautious ahead of the US presidential election. Analysts are watching the race between President Barak Obama and the Republican nominee Mitt Romney closely, with an Obama victory seen as beneficial for gold, given Mr Romney’s stance on monetary easing. “Obama is supporting Bernanke, and is supporting monetary stimulus,” noted Mr Hansen, as quoted by Reuters. “With a Romney win – he has been criticising the approach of the Fed – Bernanke will not be renewing his contract,” added Mr Hansen, referring to the Fed’s Chairman Ben Bernanke, whose second term ends January 31, 2014.

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