Gold prices were fast approaching the 1,900/ounce, amid global investors and gold traders setting their bets out on the outcome of the U.S. election and other prevailing macros, like the rising COVID-19 caseloads disrupting financial markets.
What we know
At about 7.05 GMT, Gold futures traded at around $1,891/ounce as the weaker dollar helped move prices upward.
With an important political event coming to play, gold traders and global investors flock to gold, in taking advantage of the myriad uncertainties that can occur, on the basis that the race looks like a tough call by independent political strategists.
What this means
Should the result bring a blue party presidency, the bias is that gold bulls would have enough gas to reach at least $2,000/ounce, on the bias that a substantial COVID-19 stimulus program would weaken the dollar and boost the precious metal value.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a detailed note to Nairametrics spoke on the political macros affecting the precious metal market.
“Gold is down over the last two weeks, which is understandable, as the COVID-19 outbreak is getting progressively worse in Europe and most of the world, leading to renewed lockdowns.
“It seems this is now somewhat priced into European equities, and there does not seem to be much more room for risk reduction ahead of today’s US elections.
“The potential unlocking of another US fiscal stimulus package would be most flattering for gold. With the blue wave impulse kicking in, gold remains in demand, supported by hopes for a stimulus deluge that could trigger the elusive inflationary surge.”
What to expect
It’s key to note that the US election will capture the world’s attention now and most of all, it’s expected that there will be a significant amount of price swings coming to play in some hours’ time.