Silver prices rocket as US dollar melts on Biden victory expectation

Precious metals bounced as the markets price in a Joe Biden victory in what has been a knife-edge US election.

The US dollar has melted through the 93 area to print a fresh US election inspired low of 92.48 despite the contested results of various states voting. 

With the likelihood of a bigger stimulus plan from a Democratic president next year, silver is trading higher by some 4.79% at the time of writing having travelled from a low of $23.8970 to a high of $25.1216.

Thus far, the market is looking past litigation threats.

However, a long drawn out dispute through the courts could well have the markets thinking twice before committing their full allocations away from the US dollar which could cap the upside in the precious metals. 

Equally, the Republicans are holding onto the Senate. The Democrats retain a majority in the House, but it shrank and slumping inflation expectations provide an offset for precious metal bugs. 

A smaller fiscal package is a disappointment relative to prior expectations of a Blue Wave.

''Investment flows into gold have subsided, which is keeping gold pricing off of its relative value to the broad dollar. In fact, the popular SPDR gold fund is on track for the third week of cuts in gold holdings, the largest consecutive weekly drawdown since November 2019,'' analysts at TD Securities explained.

Meanwhile, the Federal Reserve is coming up today.

Central bankers promise that they will keep the plethora of support purchase programs going and markets “functioning”. 

However, there is less emphasis on today's meeting and the post-election period should dominate. Markets are aware the Fed can only do so much.

Silver levels