Price of Gold Fundamental Daily Forecast – Upside Bias Continues as Biden Moves Closer to Victory

Gold futures are trading at their highest level since October 22 as the dollar collapsed against a basket of major currencies on Thursday, amid increasing bets from investors on the likelihood of bigger economic support measures as Democrat Joe Biden inches closer to the U.S. presidency.

At 10:36 GMT, December Comex gold futures are trading $1918.50, up $22.30 or +1.18%.

Challenger Biden moved closer to the White House as the final vote count continued, while incumbent President Donald Trump alleged fraud and called for recounts even as officials tallied votes in the handful of states that will determine the final outcome.

Biden is expected to move toward larger stimulus measures than Trump, but the chances of getting these packages enacted may be difficult because of a divided Congress as the Democrats retained control of the House of Representatives and the Republicans retained control of the Senate.

A surge in demand for riskier assets is also helping to boost gold prices as investors lift their hedges in the precious metal and the sell-out of their safe-haven buys in the U.S. Dollar.

US Economic News

Although the election results are at the forefront, there is some U.S. economic news that can move interest rates, the dollar and gold, maybe not right away, but over the near-term as political tensions calm.

Today’s Weekly Unemployment Claims are expected to come in at 740K, down from the previously reported 751K.

Preliminary Nonfarm Productivity is expected to have risen 3.6% and Preliminary Unit Labor Costs are expected to have fallen 10.0%.

Federal Reserve on Tap for Latest Monetary Policy Announcements

Attention will turn toward the U.S. Federal Reserve later in the day at 1900 GMT, when central bank policymakers will release their latest policy statement after holding a two-day meeting. The Fed is expected to repeat its pledge to do whatever it can to help the economy.

Daily Forecast

We have an upside bias today in anticipation that Joe Biden will be declared the winner of the U.S. presidential election. Buyers are also close to triggering a technical breakout to the upside that will help send price to multi-week highs.

After the initial thrust, however, profit-takers should come in quickly as President Trump is likely to challenge the results, which could tie up the matter in the courts for a number of weeks. Although Trump will have a hard time proving fraud in the election, he can disrupt the flow of the process enough to cause doubt and uncertainty that could send investors into the safe-haven U.S. Dollar and thus, weaken demand for dollar-denominated gold.

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