US Election Countdown: Will Gold Slump？

Trump recently acknowledged that the new round of stimulus bill which he pledged to achieve before the election seems to be impossible. In the wake of the news, gold retreated nearly 2%! In addition, investors have selected the US dollar as the prime currency for risk aversion amid worries about the rising infection cases of COVID-19 in Europe and the uncertainties of the US presidential election.

Picture source: TradingView

Despite recent volatility, gold prices have climbed by 25% since the beginning of the year. Amid unprecedented global stimulus, gold has been regarded as a hedge against inflation and devaluation.

“Overall, the gold market is lower on a strengthening dollar due to the lack of stimulus measures and risk-off mentality heading into this election.” Analysts said that although precious metals prices had dipped, the move was not yet being precipitated by a rush to cover losses elsewhere and meet margin calls, as happened in March.

In the short term, Comex Gold could be forming a base around $1,880-1,840, while the growth are likely to be capped in the range of $1,940-1,975. As for gold prices in India, dips towards 49,500-48,500 rupees per 10 grams is a good range to buy with short-term upsides being capped around 52,200-54,000 rupees.

Picture source: Bloomberg

With the US election approaching, investors should better stay alert to potential risks. As a leading media in forex industry, WikiFX has integrated news feeds, forums, exposures, broker information query and other functions. For detailed financial information, please download the WikiFX APP - bit.ly/wikifxIN