The DOLLAR index.DXY was down slightly in intraday trading on Wednesday, trading near 92.65. Spot gold continued to pull up short – term, gold just broke through $1,880 an ounce barrier. Gold was also helped by a weaker dollar and renewed focus on the possibility of more monetary stimulus. Moreover, the uncertainty of the US election continues to support gold prices. US President Donald Trump has announced on Twitter that corruption at the ballot box will be revealed.
Gold prices rose nearly 1 per cent on Tuesday as renewed attention focused on the possibility of more monetary stimulus to revive a global economy still reeling from the coVID-19 outbreak. Spot gold closed at $1,877.11 an ounce, up $14.95, or 0.80 percent.
Gold plunged nearly $90 on Monday after U.S. drugmaker Pfizer said its coVID-19 vaccine was more than 90 percent effective, based on preliminary trial results. Some investors believe gold prices have fallen too far and are buying on dips. In addition, there are still factors underpinning gold fundamentals, which helped the price rebound on Tuesday.
Carlo Alberto De Casa, an ActivTrades analyst, said investors appeared to realise that central Banks were still being forced to “print money” to rescue the economy and that the covid-19 crisis was not yet over. He said he expected gold prices to maintain the sideways trend of the past few weeks.
Lachlan Shaw, head of commodity research at National Australia Bank, said the central bank was unlikely to change its easing stance in the near to medium term as it would take time for vaccine deployments and economic growth, inflation and the labor market to pick up. “If inflation expectations rise as a result of vaccine-driven economic activity, that should depress the long-term performance of U.S. real yields and become a supportive factor for gold,” Shaw said.
Gold tends to benefit from broad-based stimulus because it is seen as a hedge against inflation and currency depreciation.
Stephen Innes, chief global market strategist at Axi, a financial-services firm, said: “I still think we have more stimulus, the Fed will keep interest rates low and the vaccine will provide the reflationary impulse… That’s why the market is still holding gold.”
Dallas Fed President Richard Kaplan said on Monday that a renewed coVID-19 outbreak posed risks to the economy, while Cleveland Fed President Cleveland Meester said the central bank’s emergency lending program was still necessary.
Zaner Metals analysts noted that safe-haven bulls remained moderately positioned in the face of continuing economic uncertainty and, with demand from China and India rising, advised traders to take long positions in the coming trading sessions.
Gold’s return to positive territory after trading near $1,860.90 an ounce on Tuesday makes our bullish view still valid, according to Economies.com. As long as gold stays above $1,860.90 an ounce, the outlook remains bullish, waiting for gold to test $1,901.80 first.
Gold is expected to surge further once it breaks $1,901.80 an ounce, with the next target at $1,934.86, Economies.com added.
Trump’s tweet: Voter corruption to be revealed
On Saturday, a number of US media outlets predicted That Democratic presidential candidate Joe Biden would win the US presidential election with 270 electoral votes. But Mr Trump has so far refused to accept defeat, accusing the election of fraud.
The Trump campaign has filed lawsuits in several key battleground states where Biden won, asking local judges to either invalidate mail-in ballots or stop counting. This year, a record number of postal ballots were mailed due to the Novel Coronavirus pandemic.
Senior Trump campaign officials have said they would be willing to appeal to the Supreme Court if necessary if state courts rule against them. The Trump campaign has accused local election officials of not allowing their delegates to see the vote count and has alleged illegal voting took place in states including Michigan, Nevada and Pennsylvania.
States have until December 8 to resolve election disputes, including recounts and court arguments over the results. Members of the Electoral College will meet On December 14 to finalize the outcome.
US President Donald Trump has announced on Twitter that “ballot corruption will be revealed on Fox’s Sean Hannity show tonight at 9 pm (10 am Hong Kong time on 11 November)”.
In a pair of tweets earlier On Tuesday, Trump said, “We are making great progress and the results will come out next week to make America great again!” “We will win!” he wrote in another tweet.
On the night of November 7 local time, Mr Trump tweeted, quoting legal scholars, that “we have seen many sworn testimony that there was election fraud”.
U.S. Attorney General William Barr has authorized the Justice Department to investigate any “material allegations” of fraud in the 2020 election, the Hill reported Monday. Mr Barr wrote in a memo: “If there are clear and clearly credible allegations of irregularities, an investigation may be initiated. If the allegations are true, they could affect the outcome of a federal election in one state.”
Us media described the move as a policy shift by the Justice Department, which had previously advised prosecutors not to take public investigative steps until elections were over or results were confirmed.
A Justice Department official told NBC that Mr. Barr’s memo did not mean that “significant irregularities” had been confirmed in the election, but rather gave the department the authority to investigate whether there were clear and apparently credible allegations of irregularities. But if the allegations prove true, the investigation could affect the outcome of individual state elections.
“It is clear that no state has certified its election results,” Senate Majority Leader Mitch McConnell said in a speech on Monday. We have at least one or two states that are already doing recounts, and I believe the President should launch legal challenges in at least five states.”
Mr McConnell said the President had a “100 per cent right” to challenge the election results, with Republican lawmakers also siding with the White House.
Lindsey Graham, chairman of the Senate Judiciary Committee, said he would investigate “all credible allegations of voting irregularities and misconduct,” the Hill reported on Saturday.