Gold prices on Friday extended this week’s gains stemming from U.S. President Barack Obama’s reelection to a second term in office.
Investors took up positions on sentiments under President Obama, the Federal Reserve will stick with its loose monetary policies that have weakened the dollar to drive recovery.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were up 0.37% at USD1,732.35 a troy ounce, up from a session low of USD1,727.05 and down from a high of USD1,738.75 a troy ounce.
Gold futures were likely to test support at USD1,727.05 a troy ounce, the earlier low, and resistance at USD1,738.75, the earlier high.
During the presidential campaign, President Obama’s Republican challenger Mitt Romney said he opposed the Federal Reserve’s loose policies, including quantitative easing, under which the Fed buys bonds held by banks, pumping the economy full of liquidity to depress borrowing costs to spur recovery, which weakens the dollar as a side effect.
Fed Chairman Ben Bernanke’s term ends in January of 2014, and a Romney victory could have increased the chances that today’s head of the U.S. central bank would have been replaced by a more hawkish figure.
An Obama victory quashed such talk, which sent gold prices rising.
Elsewhere, French industrial production fell 2.7% in September, way more than market calls for a 1% decline, and off from 1.9% gain in August.
In Italy, industrial production dropped 1.5% in September, slightly worse than expectations for a 1.4% drop and way below a 1.7% increase in August.
The data sent the euro falling as did Greek financing concerns, which fueled safe-haven demand for gold.
The country hopes to tap a EUR31.5 billion tranche of aid after pushing through austerity measures that aim narrow deficits.
Investors are waiting for the Greek parliament to vote Sunday on its 2013 budget.
The budget must be passed to tap rescue funding packages.
Elsewhere on the Comex, silver for December delivery was up 1.22% and trading at USD32.633 a troy ounce, while copper for December delivery was down 0.75% and trading at USD3.443 a pound.
