- Gold prints four-day winning streak, remains mildly bid around one week high.
- Hopes of more US stimulus, on expectations of a blue wave in America, favor the bulls.
- Initial polls will be the key to watch in Asia.
Gold prices take the bids near $1,909/10 during the initial Asian session on Wednesday. In doing so, the yellow metal probes the one-week high amid risk-on mood. Global markets have recently turned optimistic on expectations of the Democratic Party’s sweeping victory in the US 2020 elections. The upbeat trading sentiment weighs on the US dollar and backs the bullion buyers.
Optimists eye a blue wave but Trump can surprise…
Early forecasts concerning the US 2020 elections have started rolling out. The recent one from the YouGov suggests landslide victory of the Democratic candidate Joe Biden. Global markets have been anticipating the blue wave, a condition where Democrats hold reins in both the US houses, mainly due to their favor for the easy money.
Read: 2020 US Elections: YouGov predicts Biden winning 382 votes
The risk-on mood weighs on the greenback and pushed the US dollar index (DXY) towards posting the biggest losses in over two months. With the US dollar having an inverse correlation to the gold prices, the yellow metal benefits from the US currency’s weakness, as it did in recent days.
Also portraying the market optimism are the upbeat prints of Wall Street and the US treasury yields. Further, S&P 500 Futures print 0.26% intraday gains after rising for the last two days.
It should be noted that the exit polls will start rolling out soon and will propel the liquidity into the market. Hence, gold traders should remain cautious. However, optimism concerning a blue wave can keep bulls hopeful.
Read: 2020 Elections: How stocks, gold, dollar could move in four scenarios, nightmare one included
Technical analysis
Unless crossing 50-day SMA near $1,914, gold buyers are less likely to aim for the previous month’s high surrounding $1,934.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.