While wider markets appear complacent as to whether Donald Trump or Hillary Clinton wins, gold bullion fell 4.4% against the rising US dollar in September, with Western investor sentiment towards the metal reaching a new 3.5 year high as investors jumped on the falling price.
Online physical gold and silver market BullionVault produces a Gold Investor Index to measure whether private investors are starting or growing their gold holdings, or reducing them. The index increased from 55 in September to 56.8 last month, beating the post-Brexit peak of 56 in August.
The index would read 50 if the number of net buyers exactly matched the number of net sellers across the month.
The sharpest monthly drop in almost a year saw the number of gold buyers across the month rise by more than a third, while the number of sellers fell 16% compared to September.
Adrian Ash, head of research at BullionVault, said: “US investors have leapt on the pullback in gold prices to build their holdings ahead of next week's election.
“Just as with Brexit, the wider financial markets look complacent about the result. So for gold prices, the risk of a sharp rise if Trump produces a shock win looks much greater than a drop if Clinton matches expectations.”
Elsewhere, the Silver Investor Index also rose in October, up from 52.9 to 57.2, following its six-month run of rising prices, which ended in August – silver’s longest positive run since 2006.