Gold Price Analysis: XAU/USD refreshes one week high above $1,900, US elections in focus
- 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.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
