Investors flocked into the haven of gold on Wednesday amid jitters in the global financial markets prompted by fears that Donald Trump could pull off a shock Brexit-style victory in the US presidential race.

Shares and the US dollar also fell after opinion polls suggested that the contest between Trump and his Democrat opponent, Hillary Clinton, was now too close to call.

Wall Street’s assumption that Clinton was cruising to a comfortable victory has been shattered by the FBI’s announcement on Friday that it was looking into a batch of freshly discovered emails that might have a bearing on its investigation into the former US secretary of state.

As the battle for the White House entered its final days, evidence that Clinton’s seemingly unassailable lead has been whittled away led investors to speculate on a repeat of the UK’s EU referendum in June, when opinion polls were suggesting a victory for the remain side throughout the campaign and up until the polls closed.

“Now that it’s a bit less certain that [Clinton] is going to win, we’re seeing the impact of investors finally taking evasive action – probably evasive action which they should have taken a month ago,” said Ken Odeluga, market analyst at City Index. “The caution is setting in.”

Paresh Davdra, chief executive of RationalFX, said: “Despite seeming improbable to most of us for the majority of the last year, the prospect of a Trump presidency has long unsettled economists and market analysts, who predicted he would bring uncertainty to markets.



“This was highlighted [on Wednesday] by a poll that showed that a Trump win was the likely result of next week’s election, causing global markets to panic and investors to back away from the dollar. Now that the stability represented by Clinton is no longer assured, the following week will be a tense period as global markets seek to avoid the kind of complacency shown before the Brexit vote.”



Gold rose $15 to stand at just over $1,300 an ounce as investors sought out safe havens in the event of a defeat for Clinton. Meanwhile, the dollar lost ground against the euro, the Japanese yen, the Swiss franc and the recently battered pound. Sterling was up two-thirds of a cent against the greenback to just over $1.23 – its highest level in three weeks.



Shares dropped on the world’s major bourses, with the leading index of UK shares – the FTSE 100 – closing 72 points lower at 6,845. In New York, the S&P 500 was on course in early trading to post its seventh consecutive day of losses.

Donald Trump smiles during a campaign rally in Miami. Photograph: Carlo Allegri/Reuters

Financial markets were also rattled by a 3% drop in oil prices following news of the biggest increase in crude stocks in the US since modern records began in 1982. The cost of a barrel of US light crude dropped by almost $1.50 on news that oil inventories in the past week had jumped by more than 14bn barrels compared with the 1bn barrel increase dealers had expected.

The Federal Reserve, the US central bank, continued its wait-and-see approach to interest rates at the end of a two-day meeting. But the Fed dropped a broad hint that it would act at its next meeting in December by saying that there was not enough evidence “for the time being” to warrant higher borrowing costs.

Andrew Hunter, US economist at Capital Economics, said there was a risk that the unsettled mood in the financial markets could linger on even when the result of next Tuesday’s election was known since there was a risk of a repeat of events 16 years ago when the race between George Bush and Al Gore was finally decided by the Supreme Court weeks after polling day.



“The presidential election race is now too close to call, raising the possibility of a near-tied election result that would be aggressively disputed by one or both of the candidates,” Hunter said. “Under those circumstances, the infamous 2000 election suggests that the uncertainty could persist for at least a month and could weigh heavily on the stock market during that time.”



