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Energy, Gold Futures Higher, Cattle Lower

November 4, 1986

Undated (AP) _ The national elections rippled into the financial futures markets Tuesday, but analysts said the effect appeared to be minimal.

In theory, Democrats gaining control of the Senate would be bullish for gold, but bearish for the dollar, Treasury bonds and other financial instruments.

″That’s the general jabber,″ said Larry Morgan, an analyst in Chicago with Dean Witter Reynolds Inc. ″While there might be some immediate reaction along those lines because it’s one of those things everyone tells himself, the market’s far too complicated (for long-term implications).″

While there were some reports of traders squaring their accounts before the election returns started rolling in, analysts said this was mostly a sidelight.

In the markets, energy futures were higher, gold advanced and cattle was mostly lower while pork showed some strength.

Oil futures ″got a pretty good runup early on a rumor that Saudi Arabia was going to reduce its output by 1 million barrels a day″ until OPEC’s next meeting in December, said Richard Marose, an analyst in Chicago with Geldermann Inc. ″But buying tapered off when nothing further was heard about this and the market finally discarded it as merely a rumor.″

West Texas Intermediate crude oil settled 11 cents to 25 cents higher at the New York Mercantile Exchange with the December contract at $14.96 a barrel; heating oil was 1.31 cents to 1.52 cents higher with December at 42.57 cents a gallon; and unleaded gasoline was .25 cent to 1.07 cents higher with December at 41.11 cents a gallon.

The main element helping gold futures was a better tone in the physical market, said Bill O’Neill, research director for Elders Futures Inc. in New York.

Producting nations, particularly the Soviet Union, have been selling gold in recent weeks, but this dried up in the last couple days, he said.

Firmer oil prices also helped gold futures.

″And there was a little short covering (buying to offset earlier sales) ahead of the elections but this was more of a sideshow than anything else,″ O’Neill said.

The market views Democratic control of the Senate as more inflationary, and thus bullish for gold.

On the Commodity Exchange in New York, gold settled $4.30 higher with the contract for delivery in November at $409.30 a troy ounce; and silver was 2 cents to 2.1 cents higher with November at 573 cents a troy ounce.

Cattle futures prices were mostly lower while the pork complex showed some strength on the Chicago Mercantile Exchange.

Frozen pork bellies rallied after two down days because of a bullish storage report, said Chuck Levitt, an analyst in Chicago with Shearson Lehman Brothers.

Live cattle settled .13 cent lower to .15 cent higher with the December contract at 60.17 cents a pound; feeder cattle were .20 cent lower with .08 cent higher with November at 62.12 cents a pound; live hogs were .53 cent lower to .65 cent higher with December at 51.90 cents a pound; and frozen pork bellies were .28 cent to .50 cent higher with February at 66.45 cents a pound.

Most grain futures prices advanced while the soybean complex was weaker on the Chicago Board of Trade.

Corn futures drew some support from firm cash markets and from better-than- ex pected export business, particularly with Taiwan and South Korea, said Dale Gustafson, an analyst with Drexel Burnham Lambert Inc.

Wheat settled 1 cent to 2 cents higher with December at $2.90 3/4 a bushel; corn was unchanged to 1 1/4 cents higher with December at $1.75 1/4 a bushel; oats were unchanged to 1 1/4 cents higher with December at $1.35 a bushel; and soybeans were 1 1/4 cents lower to 1/4 cent higher with November at $5.00 3/4 a a bushel.

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