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Gold gains as Biden victory dents dollar, boosts stimulus hopes

 

·         Gold rose on Monday as Joe Biden’s win in the U.S. presidential race weighed on the dollar and ignited hopes of more monetary stimulus measures to revive an economy battered by COVID-19.

 

·         Spot gold rose 0.4% to $1,960.11 per ounce by 0817 GMT. Earlier in the session, it hit its highest since Sept. 16 at $1,965.33.

 

·         U.S. gold futures gained 0.4% to $1,958.80.

 

·         “Gold prices are moving up anticipating another stimulus (package) by the U.S. and once that comes, you could see another leg of this rally,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.

 

·         “Considering the way currency debasement is taking place, further upside should not be ruled out… Prices on COMEX can test the $1,980-$1,985 level in a month’s time.”

 

·         A potentially divided U.S. congress may mean a smaller fiscal stimulus package, but that could put the spotlight on the Federal Reserve to prop up the economy.

 

·         Gold tends to benefit from widespread stimulus as it is considered a hedge against inflation and currency debasement.

 

·         As the pandemic is shaping the economic backdrop, investors will continue to see low interest rates and a weaker U.S. dollar and that should help gold perform relatively well, said ANZ analyst Daniel Hynes.

 

·         Technically, gold may rise to $1,975, having cleared resistance at $1,951, Reuters technical analyst Wang Tao said.

 

·         Silver rose 0.8% to $25.79 per ounce. Platinum climbed 1.4% to $901, while palladium fell 1.3% to $2,458.48.

·         Silver Price Forecast – Silver Rally Only to Give Up Some Gains

The silver market rallied initially on Monday, breaking above the $24 level but did give up some of the gains as we get above that crucial level.

 

Silver markets rallied initially during the trading session on Monday, breaking above the $24 level. However, we have seen a lot of resistance above there to turn the markets back around. By doing so, the market shows that we are going to continue to struggle going higher, and of course we have to keep in mind that the 50 day EMA is just above.

 

While I do not like the idea of shorting silver, I do expect that we will probably pull back a bit. Ultimately, I think that will only end up being a buying opportunity as it should be plenty of support near the bottom of the hammer from Thursday, and of course the $22 level. Underneath there, we have the 200 day EMA and the $20 level as well.

 

 Reference: CNBC, FXEmpire