The possibility of victory for Donald Trump and a second US interest rate hike could cause increased volatility in gold markets in Q4, according to Citigroup.
Bloomberg reports Citigroup has raised Trump's (pictured) odds of winning the US presidential election from 35% to 40%.
Combined with the likelihood of another interest rate rise in Q4, this situation could lead to a bumpy ride for bullion and foreign exchange markets during the rest of the year.
Gold bullion prices have increased by 26% this year, with gold funds such as Junior Gold and Way Charteris Gold and Precious Metals among the top performers since Brexit.
However, the metal began to give up gains during August, retreating from a high of $1,360/oz to $1,309/oz.
The current gold spot price is $1,334 and Citigroup forecasts spot gold futures could be $1,350 on a three-month basis and $1,270 on a six- to 12-month view.
Under the bank's base case gold prices may be at $1,320 in the final quarter, or as high as $1,425 under its bull case, which includes the possibility of a Trump win.
In the report, the bank said: "Polls have started to tighten ahead of the US presidential election, and Citi has raised the probability of a Trump victory.
"We expect a Trump win would bring out higher volatility in gold and forex, which in turn should lead to higher volumes in other precious metals.
However, despite Trump's popularity, rival Hillary Clinton leads the polls on a national basis by an average of 2.5%.
The candidates will square up tonight for the first presidential debate; forecast to be one of the most-watched television events in US history.