Precious metals futures, defying the theoretical dictates of the national elections, declined Wednesday with plantinum plunging $20 an ounce. The Democrats taking strong control of the Senate would, according to orthodox thinking, mean a greater inflationary bias and thus a flight to precious metals.
The elections did send metals prices higher in London, analysts said, and the expectations were that when the New York futures markets opened, they, too, would advance. But that wasn't the case.
"Most of the selling (of gold) came right on the opening" at the Commodity Exchange in New York, said Jack Barbanel, an analyst for Gruntal & Co. Trading was thin and mostly based on technical market factors, he said, with the markets--interest rates and currencies, as well as the metals--shrugging off the election results.
"Probably on second analysis, most of the Democrats (elected to the Senate) were seen as middle of the roaders, not flaming liberals," he said. "Apparently no one in the market looking at the elections thought Reagan lost it all," Barbanel said. "From the view of the trading community, Reagan may still have magic."