Election 2020, Gold Price, Coronavirus Case, Election Day – Talking Points
- Gold price could decline if rising Covid-19 cases fuel demand for USD
- Democratic candidate Joe Biden continues to lead in polls with 7-point average
- XAU / USD price action becomes more bearish; is the uptrend in danger of invalidation?
8 DAYS UNTIL THE PRESIDENTIAL ELECTION OF THE UNITED STATES
There is almost exactly one week left to Election Day and polls continue to indicate Democratic candidate Joe Biden will occupy the White House. According to RealClearPolitics, the former vice president is nearly 8 points ahead of incumbent Donald Trump. Those numbers correspond to the rough average of 7 points Mr. Biden has held for several months, except for a few brief periods of poll convergence.
2020 U.S. election polls
Spike Souring Sentiment Virus
Coronavirus cases in the United States and around the world are rising dramatically and highlight the much-feared premonition of a second wave hitting the world in the fall. As Congress is stuck in a bipartisan impasse, the lack of progress in fiscal stimulus negotiations has undermined confidence in economic stabilization and has soured risk appetite.
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Over the past few days, stock markets have plunged as demand for US dollar leaps. In the process, the allure of anti-fiat hedges like gold fell as future inflation expectations declined. Looking ahead, the prospect of reimposed foreclosure measures and tougher restrictions could be another election wildcard investors face.
Gold Price Outlook
Gold prices may be on the verge of breaking a multi-week uptrend as rising risk aversion due to a spike in Covid-19 cases puts a premium on the US dollar. This came at the expense of the comparatively less liquid precious metal, which was previously rising amid signs of economic stabilization and optimistic inflation expectations.
Gold Price – Daily Chart
XAU / USD chart created using TradingView
If the appreciation slope is invalidated, immediate support can be found at 1875.70 where selling pressure may briefly decline. However, if that floor is also broken, the next level to test may be the inflection point at 1810.33.
— Written by Dimitri Zabelin, Currency Analyst for DailyFX.com
Contact Dimitri, use the comments section below or@ZabelinDimitrisure Twitter