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In trading on Tuesday (3), gold futures closed at the highest price in about a week because investors focused on the results of the US general election. And the Fed will hold a two-day policy meeting this week.
Adrian Ash, head of research at BullionVault, said: “The rise in gold only brought us back to the price level of a week ago, which seems more to close positions ahead of the election results, rather than create new long positions.”
“However, core demand for physical gold remains positive because the long-term prospects for gold remain optimistic. No matter who wins the election, to combat the new corona epidemic, the White House will control record deficit spending. because the Fed has to launch an unprecedented monetary stimulus. Measures. “
- The price of gold futures for December delivery rose $ 17.90, or nearly 1%, to close at $ 1,910.40 an ounce.
According to FactSet data, Tuesday’s closing price is the highest price in the previous month’s contract since October 27.
- December silver futures prices rose 20 cents, or nearly 1.3%, to close at $ 24.334 an ounce.
StoneX’s head of Asian and EMEA market analysis, Rhona O’Connell, mentioned in a newsletter on Tuesday: “Basic sentiment remains positive and the election outcome may be beneficial for gold due to the potential depreciation of the gold. US dollar, new stimulus packages, negative interest rates and the Fed. Start buying long-term assets. “
Gold has been trading in crisis in recent weeks, but on Tuesday, amid concerns about the outcome of the general election and the spread of the epidemic in many US states, the price of gold struggled to stay above of the 1,900 dollars.
Analysts said that due to the large scale and scope of voting by mail in most states, election results may be delayed and market concerns are also beneficial for gold.
Post-election civil strife, disputes, or the losing party’s refusal to admit defeat are also considered to favor gold and other precious metals.
Oanda senior market analyst Edward Moya reported that the price of gold on Election Day and “all the turmoil that came with the general election, as well as the Fed policy meeting, may indicate that the Fed is poised to do more and that Congress has yet to provide financial support Election disputes, delays in Senate election results and post-election instability have led to a steady flow of safe-haven funds into gold.
Marshall Gittler, head of investment research at the BDSwiss Group, said: “If there is a blue ocean after the election, that is, the Democratic Party wins the White House and Congress, then real interest rates are likely to fall, which will benefit gold prices. “
However, if Trump is re-elected or if the Republican Party wins the Senate, then the financial markets may be aggressively “de-risking.”
“If the Republicans win the Senate, it means no fiscal stimulus measures will be introduced, so the burden of supporting the economy will fall on the Fed. In theory, this will benefit gold, but recent signs indicate that the effect of preferring a low risk may be Dominate the market, so gold may fall “.
The Fed will wrap up its policy meeting on Thursday. Two days after Election Day, the Fed is expected to communicate its willingness to provide more monetary stimulus measures if necessary.
Commodity traders have said that if the Fed has more support, it is expected to support gold and silver prices.
Trade in other metallic raw materials
- Copper futures for December delivery rose 0.5% to close at $ 3.0925 a pound.
- The price of platinum futures for January delivery rose 1.8% to close at $ 875 an ounce.
- Palladium futures for December delivery rose 3.5% to close at $ 2,297.80 a pound.
Economic data on Tuesday did not affect the uptrend in gold prices. The data showed that US factory orders rose 1.1% in September, the fifth consecutive month of increase.
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