International spot gold (Oct. 27) temporarily stabilized above the 1900 mark, but the gains are still limited, the highest intraday hit $1909.91 an ounce obviously feel the upward resistance, after the us election approaches, and fiscal stimulus agreement before this get through already, so the investor sentiment is more biased towards the sidelines, regardless of any moves in one direction it is hard to get enough.
Ole Hansen, head of commodity strategy at Saxo Bank, said investors were in a wait-and-see mode before the election. As for the outcome of the election, although Biden is ahead in the polls, the final outcome is still hard to say.
According to an update from Fox Business, the White House press secretary says the chances of a coVID-19 rescue deal before the election are slim. To make matters worse, White House National Economic Council Director George Kudlow said negotiations on the CoA package had slowed, although House Speaker Nancy Pelosi remained hopeful of a deal before Election day on November 3. Many Senate Republicans are opposed to the roughly $2 trillion figure being discussed by Pelosi and Treasury Secretary Mnuchin.
On the other hand, the vaccine news is also driving investment sentiment. Pfizer inc. (PFE, NEWS, people) on Wednesday said its large-scale late-stage trials of the novel coronavirus vaccine have not yet reached the level needed to analyze the immune response. The drug maker’s third-quarter results show that the data monitoring committee, which monitors the progress of trials, has yet to conduct an interim analysis of the vaccine’s effectiveness. This means fewer than 32 cases of coVID-19 in the subjects. The company’s vaccine trials will carry out four efficacy analyses, the first of which has a threshold of 32 cases. However, Pfizer CEO said he is confident that validation analysis of phase 3 data will begin soon. Pfizer also has a government contract to supply the U.S. with the vaccine by March of next year.
At the same time, the likelihood of an adequate DOSE of FDA-approved coVID-19 vaccine being distributed in the US in the first quarter of next year has risen to 57 per cent from a recent low of 42 per cent, according to Goldman Sachs, so investment sentiment has rebounded in anticipation.
On the geopolitical front, tensions between China and the U.S. remain high, providing continued safe-haven support for gold. Marco Rubio, the Republican senator, has proposed a bill that would ban Chinese companies on a US blacklist from accessing US capital markets, potentially dealing a blow to Chinese companies that rely on FUNDING from US investors. Rubio’s proposed bill would ban U.S. investment companies, pension funds and insurance companies from holding stakes in Chinese companies that are on a trade blacklist regulated by the Commerce Department or that have been added by the Pentagon to a list of companies backed by Chinese companies.
On a technical note, gold closed nearly flat at around $1,902.00. The fall in US Treasury yields will be somewhat supportive, but the persistence of yesterday’s gold move is undeniable. This suggests that us election risk hedging is starting to pick up. The top and bottom of the triangle are now $1,924.00 and $1,902.00 per ounce, respectively. A 50-DAY moving average of $1,919.60 / oz provides temporary resistance, while a 200-day moving average of $1,885.00 / oz provides short-term support.
Separately, global central Banks are expected to have sold a net nearly 13 tonnes of gold in the third quarter, according to research by Refinitiv, a global financial-market data provider. It was the first net sale of gold by a central bank in nearly a decade.
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.”
Jeff Wright, executive vice President of GoldMining Inc., said gold edged higher on Monday as U.S. stocks fell sharply and data showed a drop in new home sales in September. If the dollar does not strengthen, gold will go higher, he said.