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Original title: Decision analysis: gold recovers again. The US elections are closing in on investors. More long-term wait-and-see games in progress
FX168 Financial News (London) News from 15:00 to 22:30 on October 27, afternoon on the European market on Tuesday (October 27),Dollar indexIt fluctuated in the range of 92.85-92.9, and continued to decline from above 93.10 Spot gold maintained its uptrend, peaking at US $ 1,907.48 per ounce, and recovered below the US $ 1,900 mark.
Market sentiment during the European period did not change much. Investor transactions are being driven by two directional factors.
On the one hand, the worsening of the new corona epidemic in Europe and the United States has clouded the prospects for economic recovery. At the same time, the looming risks of the US elections and the delay in the US stimulus bill have added to market risk aversion. In such circumstances, the European stock markets remain depressed today after being sold yesterday. Gold’s safe-haven demand was supported and began to rebound after falling below the $ 1,900 mark.
On the other hand, judging from the longer-term outlook, the vaccine is expected to come out next year, and next week’s US general election will be resolved as well. No matter who wins, the new stimulus bill will be reached in a few weeks. The optimistic outlook has limited the decline in risk assets. The United States stock market opened higher today. As of this release (10:16 p.m. Beijing time), the Dow Jones Index is down 0.17%, while the S&P 500 and Nasdaq are up 0.21% and 0.31%, respectively.
At the same time, the US dollar continued to decline in anticipation of continued stimulus policy, falling back below the 93 mark. This drop has also boosted dollar-denominated gold further.
Investors remain cautious in general and remain highly sensitive to the news of the US general election and the stimulus bill.
According to the latest report of the day, as of Monday night local time, more than 63 million Americans had voted, either by mail or by going to the early voting table, 4 million more than the early voter in 2016.
Analysts believe that increased participation has always been seen as beneficial to the Democratic Party. The voter turnout rate in 2016 was 55.5%, compared to 57.1% in 2008 when Obama was elected. But the end result may still be unclear. Republican strategist Whit Ayres said that apart from the fact that they are “on the brink of the highest turnout in the history of the US presidential election,” it is impossible to get much foresight by analyzing early voter data. “Democrats will vote early by mail, while Republicans are much more likely to vote in person on Election Day, so early voting data cannot tell you the outcome of the election.”
Ole Hansen, Saxo Bank’s head of commodity strategy, said investors were on the sidelines before the election. As for the results of the general election, although Biden leads the polls, it is still difficult to say what the final result will be.
Hansen noted that although the short-term market appears to be stagnant, strong long-term fundamentals will continue to drive gold prices. “Due to the second wave of the outbreak in the United States, fiscal and monetary support will continue to increase to aid the already fragile economic recovery.”
Regarding the stimulus bill, according to Fox News, a White House spokesperson said the government is confident of reaching a new corona epidemic assistance deal in the coming weeks.
The United States today released a series of economic data, including the Richmond Fed Manufacturing Index for October and economic indicators from the US Chamber of Commerce.
The Richmond Federal Reserve in the United States said manufacturing activity in the fifth-largest region of the United States improved in September. Driven by the increase in new orders and employment indicators, the composite index rose from 18 in August to 21 in September and registered 29 in October. Shipments have decreased but remain positive, indicating that the economy continues to expand. The survey results also reflect the improvement of the local business environment and increased capital expenditures. Overall, respondents are optimistic that the environment will continue to improve in the next six months.
Lynn Franco, director of economic indicators at the American Chamber of Commerce, said: “Consumer confidence fell slightly in October after a substantial improvement in September. This was mainly due to weakening short-term employment prospects. There are few signs that consumers expect the economy to pick up. ” Build momentum in the final months of 2020, especially with the growing number of new crowns cases and the unemployment rate still high. “
Analysis of the main currencies:
EUR: At the beginning of the European market on Tuesday, the EUR / USD pair opened at 1.1818. During the European session, it first fell and then rose, the lowest reached 1.1795 and the highest 1.1837. Initial short-term exchange rate support is at 1.1788 and initial resistance can be seen at 1.1843.
GBP: At the start of the European market on Tuesday, GBP / USD opened at 1.3019. It fluctuates within a narrow range during European time and is currently near 1.3035. Initial short-term support for the exchange rate is at 1.2984, and initial resistance can be seen at 1.3066.
Yen: The US dollar / yen opened at 104.82 in early European trading on Tuesday. The European session fell, with a low of 104.55. The initial short-term support for the exchange rate is at 104.41 and the initial resistance can be seen at 105.02.
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