Gold sitting at the edge of US elections

Its been quite a ride for global gold prices lately. Last Friday, gold fell more than two percent to an eight-week low, dropping as low as $1,675 per ounce as improved US jobs data pulled down the metal.
Hopes of an improving US economy tarnish the golden luster to some extent as it loses its safe haven appeal.
Even though the metal went up a tad bit towards the beginning of this week, concerns abound for the metals price rally from various fronts.
Incidentally, US elections have quite a part to play in the ups and downs of the precious metal. Mitt Romney, and the likelihood of him appointing a more hawkish chairman of the Federal Reserve means that investors banking on appreciation of the metals value won be too keen on a Republican government.
"Rampant cash printing by central banks increases golds appeal as investors worry about currency debasement and inflation as a result of quantitative easing," explains an article published by Reuters earlier this week about why a hawkish monetary policy stance will not bode well for the gold bulls.
Further, the upcoming US fiscal cliff also has gold investors sitting at the edge of their seats. By the end of this year, $600 billion of tax hikes and spending cuts will come into effect, tilting the US economy towards a recession, meaning greater monetary easing and, consequently, a bull-run for gold.
Analysts opine that Republican senators would be more willing to reach a compromise over the US governments plans for financing its burgeoning fiscal deficit, if a Republican President emerges from the upcoming elections.
If Obama is reinstated, the debate over the fiscal cliff would continue, meaning better chances for gold to stay towards the upper side because of the ensuing uncertainty.
But if Romney is elected as the next president, then gold may head towards the south as CNBC quoted Goldman Sachs as having told clients that a Romney victory will more plausibly avoid a fiscal cliff.
"An Obama victory may be the green flag gold bulls have been waiting for. Not only does it suggest a tussle over the forthcoming fiscal cliff with a House of Representatives most likely controlled by the Republicans, but more importantly it removes the threat of a change in monetary policy," said Jack Farchy, commodity markets reporter at the Financial Times.
Add to this the recent strength the dollar has been gathering thanks to anticipation over the US elections and investors retreat towards the greenback as a safe haven, and golds luster is blemished even more.
In addition, beyond the US, the upcoming European Central Bank monetary policy meetings and expectations of a change of leadership in Chinas ruling communist party in the partys next gathering are other arenas that gold watchers ought to be wary of.
All in all, the results of the elections today are going to have quite a bearing on golds next trajectory. Having said that, gold prices have likely levelled off, as the Reuters quoted an analyst, "There isn much room on the downside as easing monetary policy is still a global trend."