The calm before the storm

The dollar rally came in the immediate aftermath of Tuesday’s slide, when markets were in a position to make a possible “blue wave” result.

Instability and cautious anticipation is what characterizes the performance of gold in the last trading sessions, as the yellow metal awaits the final results of the US presidential elections. Since the beginning of the week’s trading, the price of gold has stabilized between $ 1916 an ounce and $ 1882 an ounce and stabilized around $ 1908 at the time of this writing. It looks like the US election results will likely yield a split verdict, with Democrat Joe Biden getting a thumbs up as president, while Republicans appear set to dominate the Senate.

December silver futures closed down $ 0.441 to $ 23,893 an ounce, while December copper futures were flat at $ 3.1070 a pound, an increase of $ 0.0145 from the previous close.

On the economic side, US private sector employment rose much less than expected in October, according to a report issued by payroll processor ADP. According to the survey, private sector employment increased by 365,000 jobs in October after rising with an upward revision of 753,000 jobs in September. Economists had expected an increase in private sector employment by 650,000 jobs compared to the 749,000 increase that was originally reported for the previous month.

A report from the US Department of Commerce showed that the US trade deficit narrowed to $ 63.9 billion in September from $ 67 billion in August. Economists had expected the deficit to narrow to $ 63.8 billion from $ 67.1 billion originally the previous month.

Growth in service sector activity in the United States slowed more than expected in October, according to a report by the Institute for Supply Management. The US ISM services PMI fell to 56.6 in October from 57.8 in September, still above the 50 level reading, indicating growth in the services sector. Economists had expected the index to fall to 57.5.

The volatility of the currency market and the rest of the global financial markets has increased dramatically in the last 24 hours. It may remain elevated after US President Donald Trump prematurely described himself as the winner of the presidential election and indicated the possibility of the election entering a protracted legal battle. Thus, the “safe haven” US dollar bought strongly in the middle of the week’s trading after Trump told his supporters: “We will win this, as far as I am concerned, we have already. He added that he plans to go to the United States Supreme Court and wants to stop all voting. “Frankly, we won this election,” he said.

The dollar rally came in the immediate aftermath of Tuesday’s slide, when markets were in a position to make a possible “blue wave” result. Trump’s announcement is unfounded due to the ongoing count of simple observations, but indicates the possibility of the race sliding into a long-term legal battle, increasing market volatility and gold is not far from that.

Gold technical analysis:

As expected before, the bulls will still have a chance to lead the trend as long as the price of gold remains stable above the $ 1900 resistance, and the opportunity will increase further if gold prices move towards the resistance levels. in 1917, 1928 and 1955, respectively. On the downside, the 1885 support will remain important for bears to move towards stronger support levels. At the same time, I still prefer to buy gold from all the lower levels, whatever the outcome of the American election. The US Federal Reserve is expected to keep its monetary policy unchanged. The Fed administration, led by Jerome Powell, hopes that the next US president will provide the opportunity to pass more stimulus plans for the US economy.