Gold Price Prediction – Prices Rise Ahead of US General Election

David Becker
Published: Nov 2, 2020, 19:45 UTC

Gold rallies as yields drop

Gold Price Prediction – Prices Rise Ahead of US General Election

Gold prices moved higher for the second consecutive trading session. This comes despite a rising dollar. US yields moved lower on Monday, despite a stronger than expected US ISM manufacturing report which paved the way for lower gold prices. Riskier assets were mixed.  With the general election in the US on Tuesday, markets will remain on edge. A Biden victory is priced into the markets, but given the results of the 2016 election, it’s impossible to tell.

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Technical analysis

Gold prices moved higher on Monday testing resistance seen near the 10-day moving average at 1,896. Support on the yellow metal is seen near the September lows at 1,848. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 28, up from 17 which reflects accelerating positive momentum. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is in the red with a flattening trajectory that points to consolidation.

ISM Manufacturing Rises More than Expected

US manufacturing increased according to ISM rising to a 2-year high of 59.3 compared to expectations that the index would come in at 55.8. This compares to a September reading of 55.4. Gains were driven by a surge in new orders which jumped to a 17-year high according to ISM. ISM’s manufacturing employment gauge rose to a reading of 53.2 from 49.6 in September.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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