The long-term outlook for gold is bright! If this happens in the US election, it will be a blessing for gold.

Spot gold bottomed out in the Asian session on Wednesday, rebounding from near $1,880 and now back around $1,895.

Gold futures fell below $1,900 an ounce on Tuesday for the first time in four sessions as hopes for a U.S. fiscal stimulus faded and a stronger dollar weakened the metal’s appeal.

“Early vaccine hopes are fading” and “no one really knows” when the U.S. will announce more stimulus measures, Chintan Karnani, chief market analyst at Insignia Consultants, told MarketWatch. “Nervousness about the stimulus package has caused gold and silver prices to fall.”

Still, some investors are bullish on gold’s long-term prospects as they anticipate that widening U.S. and other government budget deficits will support higher prices for gold and other commodities.

“With the stimulus impasse (in Washington) likely to last only for a while after the election, gold should continue to rally,” Edward Moya, senior market analyst at Oanda, wrote in a note Tuesday.

December gold futures fell $34.30, or 1.8%, to close at $1,894.60 an ounce Tuesday, after rising in each of the past three sessions.

Markets are closely watching the race between Democratic presidential nominee Joe Biden, a former vice President, and current President Donald Trump in the 2020 race.

With about three weeks to go before the election, Mr. Trump is trailing sharply in recent polls.

Investors expect a fiscal stimulus package to help ease the economic strain of the outbreak, no matter who sits in the Oval Office. 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.

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, analysts said.

“The Northern Hemisphere is struggling with COVID-19, which means financial support is coming,” Moya said.

Johnson & Johnson JNJ. ‘s suspension of a vaccine trial was also a focus for investors, underlining the challenges of bringing an effective treatment to market.

“Novel Coronavirus infection cannot be contained in many major industrialized countries, including the United States,” wrote Jim Wyckoff, senior analyst at Kitco.com.

However, the recent strength of the dollar and U.S. stocks, which are within a few percentage points of their all-time highs, weighed on gold’s gains.

“The dollar attracts hedge funds, so the inverse relationship between the dollar and commodities is weighing on gold,” David Madden, market analyst at CMC Markets UK, said in a market note.

The ICE Dollar index.DXY rose 0.5% Tuesday and is up about 0.5% so far this week. A stronger dollar makes gold denominated in dollars more expensive for those who buy it in other currencies.

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