Gold is a little better to start the week, after posting the largest one-day drop since June on Friday. While October nonfarm payrolls came in better than expected to close out last week, it was hardly a game changer.
Nonetheless, the market wasn't as comfortable with its positioning ahead of the Presidential elections as I had thought. Whether that was a function of the jobs report, and diminished expectations of further Fed accommodations, or a more general heightened sense of uncertainty surrounding the election itself remains unclear. However, I maintain that no matter who wins the election tomorrow, the underlying fundamentals in the gold market remain favorable.
Whomever is the President come January will still be faced with a mountain of debt and probably a contentious debate over another debt-ceiling hike. The economy will still be sluggish and the jobless rate will still be uncomfortably high. The Fed's über-easy monetary policy will still be in place, as will the accommodative policies of all the other major central banks. Central bank demand for gold will remain robust. And supply concerns will persist as well.
These are all key reasons to own gold. None of them are going away any time soon.
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