Gold Price Analysis: XAU/USD teases bulls above $1,900 as Biden nears US election win
- Gold buyers eye breaking the monotony around $1,900 while extending recent pullback from $1,893.
- Joe Biden wins Michigan, has 264 votes versus 270 required.
- Ballot counting in Pennsylvania gains major attention, BOE and FOMC are additional catalysts worth watching.
Gold prices fade the recent uptick to $1,906 while easing to $1,904.50 during the pre-Tokyo open trading on Thursday. The yellow metal refreshed the two-week high the previous day but had to end the day with negligible losses as US election updates dim odds of the blue wave. However, the latest rise in the bullion could be attributed to the risk-positive news suggesting the Democratic candidate Joe Biden’s victory in Michigan.
Having secured a lead in Michigan, Biden has 264 electoral votes in his pocket versus nearly 215 counts by the current President Donald Trump. However, the key state Pennsylvania is yet to roll out the counts amid controversy over the ballots. While the Pennsylvanian Governor Tom Wolf strongly resist any efforts to shut down vote counting, the actual results are likely to take beyond Friday.
Elsewhere, Italy announces lockdown in Lombardy, including the financial capital Milan, to tame the coronavirus (COVID-19) wave 2.0. As per the latest virus update from Reuters, “Italy saw 352 COVID-related deaths on Wednesday after registering 353 the day before, the health ministry reported earlier, while the daily tally of new infections rose to 30,550 from 28,244.”
Against this backdrop, S&P 500 Futures drop 0.27% whereas the US 10-year Treasury yields also stay weaker below 0.80% by press time.
Although the US election updates will keep the driver’s seat, with Democratic victory likely benefiting the gold buyers, key monetary policy meeting from the US and the UK central banks will also be important to watch. While the Fed is less likely to offer any fresh moves, the BOE is up for a controversial rate cut to the negative zone.
Technical analysis
A falling trend line from September 01, currently around $1,912, becomes immediate key resistance. Alternatively, bears refrain from entries unless witnessing a clear break below the previous month’s low of $1,860.
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.
