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Why an Upward Price Trajectory is in Play for Gold

By:
Olumide Adesina
Published: Nov 5, 2020, 10:22 GMT+00:00

Gold traders raised their long bets arbitrarily in the precious metal market, amid a much likely Joe Biden win although the election results have ruled out a Democrat ‘blue wave’.

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Also global investors are presently not having the strengthening political uncertainty funny, thereby increasing their buying pressure on the safe-haven asset coupled with the falling U.S dollar specifically helping global investors get a good price bargain for precious metals for wealth preservation and hedge against inflation.

The drop in the value of the greenback is also triggering gold traders to make bold long bets, amid an expected rise in quantitative easing under a Joe Biden Presidency coupled with the bias that the U.S Federal Reserve has showed it support on keeping interest rates low for a long period of time.

Gold prices are now going upward on the bias that U.S Treasury yields, specifically those on the far end of the maturity curve, dropped.

Gold bulls are having the bandwagon wheel drive now on reports suggesting a lead for Democrat Presidential candidate Joe Biden, as recent results seen on some U.S media outlets show him leading with 264 electoral votes, although President Trump has moved for legal option and requested for a recount of votes in several battleground states, like Wisconsin.

However recent price action suggests the precious metal may witness choppy trade as gold traders react to the high uncertainty seen in the U.S election.

Not forgetting the odds keeping gold prices bullish for long on the bias showing COVID-19 infection rate is going out of proportion particularly in Europe, amid major European economies (France, United Kingdom and Portugal) resuming full lockdown measures in order to tame the virus, meaning the European Central Bank is most likely to go more accommodative as it battles to support a fragile European economy battered severely by the virus onslaughts.

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

About the Author

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. He is a Member of the Chartered Financial Analyst Society.

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