In the Asian session on Wednesday, the DOLLAR index rebounded and is now near 93.10. Spot gold was under mild pressure, trading around $1,906 an ounce. US President Donald Trump has admitted that a fiscal stimulus package may not be agreed before the November 3 election. The main downward pressure on gold is the lack of stimulus. However, gold is still trading above $1,900 an ounce, and analysts say a combination of continued outbreaks in Europe and the United States, coupled with uncertainty over the outcome of the U.S. presidential election, has supported safe-haven buying, limiting losses.
Spot gold closed higher on Tuesday as data showed consumer confidence in the U.S. labor market and economy fell, boosting the safe-haven appeal of the precious metal. Spot gold closed at $1,907.24 an ounce, up $5.64, or 0.30 percent, after peaking at $1,911.00 an ounce.
Gold prices turned higher on Tuesday and briefly tested key resistance at $1,910.00 an ounce, according to an article on Economies.com. However, gold has failed to break through this resistance effectively. As long as gold stays below $1,910.00 an ounce, the bearish view will remain valid for some time to come. Gold would need to fall below $1,901.80 again and stay below that level to confirm its main bearish target of $1,860.90 an ounce.
Gold was supported by safe-haven demand as the number of irus infections from novel Coronavirus continues to surge globally and concerns about new restrictions in Europe and elsewhere.
The global epidemic continues to grow, with the number of confirmed cases breaking 450,000 in a single day. More than 10,000 new cases have been confirmed in Europe in a single day. The European region has been described by the WHO as the “epicentre” of the global outbreak. The epidemic continues to worsen in the United States, with hospital admissions in many places reaching their highest levels since the outbreak began.
World real-time statistics show that the cumulative number of confirmed cases of COVID-19 worldwide has exceeded 44.23 million, and the cumulative number of deaths has exceeded 1.171 million. In the United States, the number of confirmed cases of COVID-19 has exceeded 9.03 million, with more than 232,000 deaths. The surge in the number of cases in the FALL and winter in the United States will intensify in November and December and peak in January 2021, according to the Institute for Health Statistical Assessment at the University of Washington.
Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the current surge in confirmed COVID-19 cases is not a sign of a second wave, but rather that the first is continuing and worsening. “We have not seen the Numbers fall below a good baseline,” Fauci said. It’s been going up and up and up and up until now we’ve reached unprecedented highs, and that’s really dangerous.”
In addition, increased uncertainty about the US election has made gold, a haven asset, even more attractive to investors. Polls show Democrat Joe Biden in the lead, but the race will be tighter in swing states that could determine the outcome of the election.
Mr Biden still leads by 7.9 percentage points in national polls, according to RealClearPolitics, a polling aggregator, but Mr Trump is gaining ground in the battleground states of Georgia and Michigan.
“Overall, gold remains in a tight range,” Rhona O ‘Connell, head of market analysis for Europe, Middle East and Asia at StoneX, wrote in Tuesday’s newsletter. The virus, the rigid negotiations in Washington, and the path of the campaign continue to keep players largely neutral.”
David Govett, founder of Govett Precious Metals, said there will be some profit-taking ahead of the election. “The whole market is still very strong, especially in terms of ETFS and things like that, and investors will want to lock in some gains, especially in the recent volatility. But I remain bullish on gold and wait for investors to take profits and look for bargains.”
Jonathan Jakubowski, executive chairman of The Wood County Republican Party, and Christos A. Makridis, A professor at Arizona State University’s Carey School of Business, wrote in the Capitol on Tuesday that they predict U.S. President Donald Trump will win the 2020 presidential election — and win it outright.
With a week to go before Election Day, more than 66.9 million Americans have voted early, according to the latest figures released Tuesday by the U.S. Elections Project.
A record number of voters have cast their ballots in the race between President Donald Trump and Democratic presidential candidate Joe Biden. The Novel Coronavirus pandemic has created an unprecedented demand for early voting by mail and in person.
The number of early voters in 2020 has surpassed the 58 million in 2016, accounting for 48.6 percent of the 136 million votes cast in the 2016 presidential election, according to ap statistics.
Expectations that the US fiscal deficit could rise further if the election is a landslide for The Democrats are seen as a potential long-term boost to gold.
“The precious metals market is at a standstill a week ahead of the U.S. election,” said Jim Wyckoff, an analyst at Kitco.com. Many markets are likely to suspend trading until the election results are known. Many traders will want to stay out of the market or reduce some risk as the outcome of the presidential election remains highly uncertain.”
“Novel Coronavirus is a concern,” said Michael Matousek, chief trader, U.S. Global Investors. The global economy is slowing, so they’re trying to stimulate the economy, which is generally good for gold. “However, gold is in a tight range and probably won’t move much before the election.”
“If there is a ‘blue wave’ on Election day that hints at a massive government stimulus from the novel Coronavirus bailout and infrastructure spending, the outlook for gold will continue to look positive,” Edward Moya, senior market analyst at OANDA, said in a note.
Phillip Streible, the chief market strategist at Blue Line Futures in Chicago, said: “Gold has been stuck between $1,930 and $1,880. Markets are waiting for a hint from the election.”
Mr Trump admitted there was little hope of a stimulus deal before the election
US President Donald Trump acknowledged on Tuesday that a new coronave-aid deal may not be reached before the November 3 election because the White House has been unable to bridge its differences with Senate Republicans and Congressional Democrats.
“After the election, we’re going to have the best stimulus in history,” Trump said.
Mr. Trump also accused House Speaker Nancy Pelosi of wanting to delay the stimulus plan until after the election. Mr. Trump said Americans should get a stimulus plan, but House Speaker Nancy Pelosi rejected the Coronave-aid package.
“We are always willing to negotiate because we want to help the people, but Pelosi is only thinking about rescuing democratic cities and states that are mismanaged and crime-ridden,” Mr Trump said.
Mr. Trump and The Speaker of the House of Representatives Nancy Pelosi have blamed each other for the impasse between the White House and Democrats over a new stimulus package worth about $2 trillion.
Pelosi counterattack in the letter to the house Democrats trump’s allegations, she said, White House chief of staff meadows have shown that the United States government “will not contain the outbreak,” “until Sunday, the White House and (the) senate majority leader mitch McConnell (stimulation protocol), or reject meadows explained the reasons behind this.”
“The President’s words mean nothing unless he can get McConnell to move his hand away from the pause button,” Pelosi said.
A spokeswoman for Ms. Pelosi on Monday said she remained hopeful that a bailout deal could be reached before the election, but White House spokesman Mike McNerney, in an interview with Fox Business, said the White House’s chances of reaching a deal with Democrats were ‘slim.’
Christopher Vecchio, senior currency strategist at I.G. Group in New York, said it was now unlikely that any new stimulus package would be announced before November 3. This will keep the market range-bound in the short term.
The White House hopes to reach a deal with Democrats on the coronavirus rescue bill and be able to vote in “weeks”, spokeswoman Maria Farah said on Tuesday but said such a deal would not be possible until after election day.