International spot gold rebounded on Tuesday (October 14), hitting an intraday high of $1,912.60 an ounce, back above the $1,910 mark, as the U.S. election and fiscal stimulus talks continued to influence market sentiment, while the dollar’s retreat under pressure to provide effective support for gold.
Yesterday, the International Monetary Fund raised the global economic outlook, gold price safe-haven demand fell, leading to the entry of large funds to sell, the short quickly took the initiative. But strong technical support on the day, the return of bulls and continued uncertainty over a bipartisan fiscal stimulus deal ahead of the election have renewed risk aversion and forced gold to rally.
On the other hand, vaccine development in the United States is once again facing obstacles. Eli Lilly & Company announced Wednesday that U.S. health regulators have suspended a late-stage trial of the novel Coronavirus antibody drug due to potential safety concerns. It is the second day in a row that two COMPANIES in the United States have announced a moratorium on clinical trials of coVID-19 vaccines or treatments for safety reasons. Johnson & Johnson announced Thursday that it has suspended clinical trials of a novel coronavirus candidate vaccine developed by its subsidiary Janssen Pharmaceuticals because of an “unexplained illness” in one of its subjects.
Tom Piotrowski, a market analyst at CommSec in Sydney, commented: “That just shows that the vaccine may take longer than the market expects.”
Meanwhile, as the 2020 us presidential election enters its final stretch, the political game between the two parties in the US is reaching a fever pitch. Several polls give Biden a lead of more than 10 percentage points over Trump, and the Democrats’ chances of regaining the Senate majority continue to rise.
Cases, left behind in the polls as trump the doctor announced that he was no longer contagious, can be safely restored public activities, trump campaign urged the organizer recovery was scheduled for Thursday, October 15) held the second presidential candidate television debates, and media reports said trump planned a campaign rally every day until November 3.
But investors expect a fiscal stimulus package to help ease the economic strain of the outbreak, no matter who sits in the White House. But if Mr Biden’s victory is accompanied by a broader Democratic victory in Congress, which could be a boon for gold, it may be even more important.
Analysts said signs of an increase in covid-19 cases in many parts of the world, as well as some renewed social isolation measures to limit the spread of the epidemic, could support gold prices.
From a technical point of view, the daily chart shows that the lower track (1890) of the upward channel formed during the gold day has been supported and rebounded. The initial short-term resistance is 1900, the 20-day average. If the upper break may open the space for the rebound to 1915, the central position of the channel.
In addition, as of October 13, there were 2,102.344 tonnes of gold ETF holdings in the world’s eight largest gold ETFs, up 1.25 tonnes from the previous trading day, according to data from gold information website www.24K99.com, which monitors the world’s eight major gold ETFs.
Jeff Clark, senior precious metals analyst at Goldsilver in New York, said volatility across the market will increase, but the recent bullish trend in gold has not changed. In such a risky market environment, it would not take much for gold to return to $2,000 an ounce.
According to JP Morgan, a victory for Democratic Joe Biden in the upcoming US presidential election would be a boon for gold. The bank expects gold to average $1,880 an ounce in the fourth quarter, influenced by Federal Reserve policy and inflation expectations.