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James Hyerczyk
Comex Gold
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Gold futures are trading lower on Monday, but clawing back most of its earlier losses. The catalysts behind the initial weakness was a stronger U.S. Dollar and a stalemate in the negotiations over the new U.S. coronavirus aid package. Technical factors and the remote chance of a stimulus deal could be providing some support.

At 07:54 GMT, December Comex gold is trading $1903.10, down $2.10 or -0.11%.

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Traders could also be monitoring the U.S. presidential election polls. Democratic candidate Joe Biden currently leads in the polls. His agenda is expected to be supportive for gold because he is expected to flood the economy with fiscal aid, which would weaken the U.S. Dollar and drive up inflation.

Stimulus Update

U.S. House Speaker Nancy Pelosi said on Sunday that she expected a White House response on Monday regarding the latest stimulus spending plan – but there have been few tangible signs that a long-stalled deal is actually nearer.


Rising COVID-19 Cases Should Be Supportive

A jump in global coronavirus cases, new restrictions and potential shutdowns should be supportive for gold prices over the longer-term because it will mean that central banks will have to continue to be more accommodative, but most of all, it drives up the urgency to continue to provide fiscal stimulus.

Most investors believe the U.S. will eventually reach a new fiscal stimulus deal, and the idea of more stimulus from the European Central Bank is starting to gain traction.

On Friday, Johns Hopkins University reported more than 83,000 new infections in the United States on both Friday and Saturday after outbreaks in Sun Belt states. This number beat the previous record of roughly 77,300 cases set in July.

The hits just kept on coming over the weekend when White House chief of staff Mark Meadows said Sunday that the U.S. will not get control of the pandemic amid the surge in new cases.

Meanwhile, the resurgence of the coronavirus in Europe has continued apace in recent days, with France reporting a record daily rise in infections on Sunday, Italy ordering bars to close early and shutting public gyms and Spain issuing a nationwide curfew to stem a worsening outbreak.

Daily Forecast

The short-term direction is too tough to call because of the possible swings in the U.S. Dollar. Longer-term, the market continues to be well-supported by central bank accommodations.

Basically, this means, we can live with short-term volatility until the stimulus deal is worked out and the presidential election results are settled because we are confident that central bank monetary stimulus will encourage longer-term investors to buy the dips. Any fiscal stimulus should spike prices higher, but we just have to wait for that.

For a look at all of today’s economic events, check out our economic calendar.
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