Gold inches lower during US presidential debate

The spot gold price inched lower during Asian trading hours on Tuesday as the US presidential debate was underway.

Spot gold was last at $1,335.10-1,335.50 per ounce, down $2.55 from Monday’s close. Trading ranged at $1,334.40-1,339.65 so far.

The spot gold price had edged lower at the start of the first US presidential debate between Donald Trump and Hillary Clinton with the decline accelerating an hour into the debate.

The fact that gold did not rally after the debate suggested that investors saw Clinton as the winner of the debate and there was no need to pile into safe haven assets.

Clinton’s performance was “studied and measured”, which was needed to help stop the erosion she has seen in the polls in recent weeks, while Trump “showed little grasp of policy detail”, the Wall Street Journal said in post-debate analysis.

In recent decades, these debates have not tended to shift the balance of popular opinion greatly, but with an unusually high proportion of undecided voters in this campaign, they may prove decisive in 2016, Credit Suisse said in a report on Tuesday morning before the end of the debate.

“A Trump victory, seemingly a remote possibility a few months ago, is a far more realistic prospect today,” it said.

“Markets are likely to react to the debate’s outcome and market consensus is that a strong Trump is likely to be perceived as a negative influence for global equities (greater policy uncertainty), while a solid Clinton performance seen as keeping the balance of probabilities in her (and the market-friendly status quo’s) favour.”

The US presidential election is expected to dominate market psychology for the next six weeks and how the debate impacts the candidates’ poll standings will be of interest.

The latest debate is the first of three debates before the November election – national polling averages published by The New York Times showed Clinton leading at 45 percent over Trump at 42 percent before the debate.

The second US presidential debate between the two candidates will take place on October 4 evening local time – Wednesday in Asian time zones – at the Washington University in St Louis.

The Dow Jones Industrial Average closed 0.91 percent lower at 18,094.83 before the debate. The Shanghai Composite is so far down 0.05 percent to 2,978.97 on Tuesday.

Response from the US dollar was muted during and after the debate. The US dollar index maintained its slight gains, rising 0.07 percent to 95.37 so far on Tuesday.

In other commodities, the Brent crude spot price rose 0.56 percent to $47.17 per barrel, and the Texas light sweet crude gained 0.39 percent to $45.84 so far on Tuesday.

In economic data, Chinese industrial profit growth picked up speed, growing 19.5 percent year-on-year in August, versus an 11 percent growth in July. This was also the highest rate of growth this year.

Year-to-August profits increased 8.4 percent year-on-year, a rise of 1.5 percentage points from growth in January-July.

The increase comes on overall improved sales and prices, and lower costs in August, as well as a boost from the automotive, steel and oil processing industries, the country’s National Bureau of Statistics said.

In US data released Monday, US new home sales in August were at 609,000, higher than expectations of 598,000.

Other US data due later on Tuesday includes S&P/CS Composite-20 HPI, flash services PMI, CB consumer confidence and the Richmond manufacturing index.

In other precious metals, silver was last at $19.53/19.56, down $0.12. Platinum fell $7 to $1,038/1,048, and palladium dipped $1.50 to $692/701 recently on Monday.

On the Shanghai Futures Exchange, gold for December delivery was last unchanged at 288.00 yuan per gram, and the December silver was flat at 4,323 yuan per kilogram.

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