- Gold reverses from October 22 high as US dollar picks up bids.
- Risks dwindle as the latest polls suggest tough race between Trump and Biden.
- US stock futures, Asian shares shave off early gains, US bond yields slip from five-month high.
Gold prices remain depressed recently, following the early-Asian rise to a two-week top, while taking rounds to $1,900 during Wednesday’s initial trading. While the US dollar weakness earlier favored the yellow metal buyers, the recent challenges to the risks, mainly emanating from the US 2020 presidential election, recall the greenback buyers and weigh on gold.
With the increasing odds of US President Donald Trump’s victory in Florida, as suggested by Fox News, global markets turn risk-averse off-late. The recent updates from the American election polls mark Trump’s opponent Joe Biden as a winner in Colorado while the House Republican leader Mitch McConnell’s re-election in Kentucky defied a blue wave hopes, a situation of major Democratic victory.
Check live updates: Four more years for Trump or a victory for Biden? – Live coverage
That said, S&P 500 Futures drop 0.17%, versus 1.0% initial gains, whereas US 10-year Treasury yields also take a U-turn from the early-June high probed before a few hours. Further, the US dollar index (DXY) snaps a three-day losing streak to gain 0.25% intraday by press time.
Given the Democratic victory considered favorable for markets, due to their stimulus-friendly nature, any further confirmation of Trump’s re-election could keep the risks heavy and weigh on the gold prices.
Technical analysis
50-day SMA near $1,914 keeps restricting gold’s short-term upside, which in turn pushes the sellers towards re-entry if the quote breaks the $1,894 level comprising 100-day SMA.
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