By Apeksha Nair
REUTERS - Gold prices fell on Monday as the U.S. dollar and stocks rallied after federal investigators cleared Democratic presidential candidate Hillary Clinton of criminal charges related to her use of a private email server, just two days before the election.
The Federal Bureau of Investigation (FBI) said on Sunday it stood by its earlier finding that no criminal charges were warranted against Clinton for using a private email server for government work.
Uncertainty over the outcome of the U.S. election after the FBI probe had boosted the safe-haven appeal of gold, sending prices 2 percent higher last week.
"I think the news has just taken a bit of the heat out of that safe-haven buying for gold that emerged last week after Republican candidate Donald Trump gained in a lot of polls in the U.S.," ANZ analyst Daniel Hynes said.
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"Prices are going to hover around $1,290-$1,300 for the next day or so but all bets are off on election day."
Spot gold was down 1.07 percent at $1,289.81 an ounce at 0607 GMT. The metal hit a low of $1,287.73 earlier in the session.
U.S. gold futures fell 1.06 percent to $1,290.70 per ounce.
Asian stocks bounced while the dollar rose against the yen.
Spot gold has established a bearish target at $1,273 per ounce, following its failure to break a resistance at $1,308, according to Reuters technical analyst Wang Tao.
Meanwhile, bullion was also being pressured by increasing odds of an interest rate hike in December by the Federal Reserve.
"Once we get past the U.S. election, the focus will return to the Fed. I suspect we could see some weakness leading into the meeting if the economic data in the U.S. continues to be strong," Hynes added.
Strong U.S. jobs data in October showed continued progress towards the Federal Reserve's goals, two Fed policymakers said on Friday, with both supporting an interest rate hike at the central bank's meeting in December.
"The rate rise in December is largely already priced in," said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.
"If we were to see a further delay in an increase, that would drive gold higher. I wouldn't be surprised to see a knee-jerk move following a rate rise announcement but we think it will be brief."
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Silver was down 1.2 percent at $18.17 an ounce, while platinum fell 0.3 percent to $993.10.
Palladium was up 0.25 percent at $625.53 an ounce.
(Reporting by Apeksha Nair and Koustav Samanta in Bengaluru; Editing by Joseph Radford and Biju Dwarakanath)
Disclaimer: No Business Standard Journalist was involved in creation of this content
