FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
44,145,449Confirmed
1,169,667Deaths
32,350,904Recovered
Fetching Location Data…
Advertisement
Advertisement
James Hyerczyk
Comex Gold

Gold futures posted their first weekly decline in three weeks, as fading chances of a U.S. stimulus package before the November 3 presidential election dented the dollar-denominated metal’s appeal as an inflation hedge, while increasing the appeal of the safe-haven U.S. Dollar.

While sentiment for gold remains bullish over the long-run, without a strong short-term catalyst, it looks like it is going to have trouble sustaining a rally. The short-term catalyst seems to be another fiscal stimulus aid package. Without the stimulus bill, gold prices could drift sideways to lower over the near-term.

Last week, December Comex gold futures settled at $1906.40, down $19.80 or -1.03%.

One thing we did learn late last week is that better than expected economic data could help support gold if it weakens the U.S. Dollar. On Friday, U.S. retail sales data came in better-than-expected, pressuring the greenback while underpinning gold. However, gold did give back some of those gains after U.S. industrial production fell more than expected.

As far as a financial aid deal is concerned, Democrats and Republicans seemed to agree on a U.S. stimulus deal before Election Day even as coronavirus cases continue to rise and a labor market recovery stalls.

The latest COVID-19 news reveals that fresh restrictions to combat COVID-19 have been introduced across Europe, and the U.S. Midwest is battling spikes in new cases, threatening to derail the country’s economic recovery from the coronavirus shock.

This news is potentially bullish for gold prices if it encourages U.S. policymakers to move faster toward passing a stimulus bill, but so far it hasn’t been able to appeal to their sense of urgency.

Weekly Forecast

Despite the lower weekly close, the sideways trade suggests gold investors are still anticipating a stimulus deal despite the current stalemate in Washington. However, they probably accepted that it won’t be coming before the November 3 election.

We’ve seen weakness, but we haven’t seen a price crash which probably means the longer-term bulls are buying on weakness or the dips. This further supports the notion that all it is going to take is a catalyst to trigger a breakout to the upside.

Investors are fairly certain the stimulus is coming. They just don’t know when or how big the financial aid package will be. If you’re a short-term trader, it may be a good idea to keep your powder dry until after the election. If you’re a long-term investor then continue to accumulate gold when it trades at a value area.

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

Advertisement
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US