October 28, 2016 / 9:50 AM / 3 years ago

PRECIOUS-Gold jumps to nearly 4-week high on FBI Clinton probe

* U.S. third-quarter GDP data better-than-expected
    * Palladium touches 16-week low
    * Platinum on track for biggest weekly rise in three months

 (Updates prices; adds comment, second byline, NEW YORK
dateline)
    By Marcy Nicholson and Zandi Shabalala
    NEW YORK/LONDON, Oct 28 (Reuters) - Gold rose 1 percent to
the highest level in nearly four weeks on Friday, extending
gains late in the session after the FBI said it will further
investigate Democratic presidential candidate Hillary Clinton's
use of a private email system.
    Just 11 days ahead of the U.S. presidential election, the
news shook up the campaign, in which Clinton is the front-runner
in opinion polls. 
    Spot gold was up 0.8 percent at $1,278.38 an ounce by
2:54 p.m. EDT (1854 GMT), after rising 1.3 percent to $1,284.14,
the highest since Oct. 4. It is on track to close the week up
0.9 percent. 
    U.S. gold futures settled up 0.6 percent at
$1,276.80. 
    "The FBI headlines startled a somnolent gold market, driving
bullion a percent higher in a hour on concerns that a late
October surprise could suddenly bolster (Donald) Trump's sagging
fortunes," said Tai Wong, director of base and precious metals
trading for BMO Capital Markets in New York.
    "The rally may not last, though, as we are at the two-minute
warning and Clinton is ahead by two scores, so it would require
a truly shocking revelation to derail her chances."
    Wall Street and the dollar fell against a basket of
six major currencies after the Federal Bureau of Investigation
said it would probe additional emails related to Clinton while
she was secretary of state. 
    The greenback was already weak, having shrugged off slightly
better-than-expected U.S. third-quarter GDP data amid firm
demand from Asia.
    The U.S. economy grew by 2.9 percent in the third quarter,
outpacing analysts' consensus forecast of 2.5 percent. The data
strengthened the case for an interest rate increase, making
non-yielding assets such as gold less attractive while boosting
the dollar and U.S. treasuries.
    Demand for bullion in India is expected to pick up during
the Dhanteras and Diwali festivals, when gold is traditionally
given as a gift.
    In other precious metals trading, silver gained 1.3
percent at $17.82 an ounce and platinum rose as much as
2.6 percent to $987, the highest since Oct. 5.
    Silver was on track for its biggest weekly gain in five,
while platinum was heading toward its best week in three months.
    A Reuters poll on Friday showed platinum prices are expected
to rise next year to their highest since 2014 on an average
basis, but will remain at a discount to gold. 
    Palladium rose 1.4 percent at $618.35, switching
direction after tapping a 16-week low of $608.47.

 (Additional reporting by Apeksha Nair and Vijaykumar Vedala;
Editing by Mark Potter and Dan Grebler)
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