September 27, 2016 / 10:45 AM / 3 years ago

PRECIOUS-Gold slips as dollar and stocks gain after U.S. debate

* Equity markets bounce after U.S. presidential debate
    * Gold snaps six-day winning streak

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, Sept 27 (Reuters) - Gold fell on Tuesday as
the dollar and stocks gained ground on the view that Democratic
U.S. presidential candidate Hillary Clinton got the better of
Republican rival Donald Trump in their first debate, denting the
safe-haven appeal of bullion and bonds.
    Markets have tended to see Clinton as the candidate of the
status quo, while few are sure what a Trump presidency might
mean for U.S. foreign policy, trade or the domestic economy.
  
    Gold, often seen as an alternative investment in times of
geopolitical and financial uncertainty, suffered after the
debate as a higher appetite for risk favored shares and the
dollar over the precious metal. 
    Spot gold was down 0.8 percent at $1,327.46 an ounce
by 2:39 p.m. EDT (1839 GMT), snapping a six-day winning streak.
U.S. gold futures settled down 1 percent at $1,330.40. 
    "The general sentiment in the market is not supportive for
gold; it's deteriorated somewhat. The stronger dollar is also
not helping," ABN AMRO commodity strategist Georgette Boele
said.
    She said trading was in a narrow range of $1,300 to $1,350
and this was likely to continue in the absence of major news.
    Some market participants said the U.S. presidential race was
still a hot issue, with polls giving Clinton only a slight lead
over Trump, and this could prevent gold from falling too
sharply.
    "Gold slipped back slightly on the back of that but this
story is far from over," David Govett, head of precious metals
at Marex Spectron, said.
    The dollar index was up 0.2 percent. 
    Yields on U.S. bonds, which are also seen as a safe-haven
asset in times of global turmoil, fell to three-week lows.
    "The elevated level of long speculative positions indicates
that gold remains in a highly vulnerable state, as an even 
slight improvement in investors' enthusiasm and a shift in
sentiment towards gold to more bearish could trigger massive 
long liquidation and reverse gold's impressive gains," Societe
Generale said in a report.
    Still, the French bank forecast a moderately higher gold
price of $1,350 in the final quarter of 2016 due to expectations
for a slow pace of credit tightening by the U.S. Federal
Reserve, with the next rate hike likely in December.
    Among other precious metals, silver shed 1.4 percent
at $19.14 an ounce, its biggest loss over two weeks.
    Platinum fell 1.6 percent at $1,019.80 while
palladium rose 0.8 percent at $698.80.

 (Additional reporting by Swati Verma and Vijaykumar Vedala in
Bengaluru; Editing by David Clarke and Richard Chang)
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