Gold (XAU/USD) Analysis, Price and Chart
With just a few days to go before the 59th US presidential election on November 3, incumbent Donald Trump is said to be trailing the Democratic candidate Joe Biden in the polls, and in the all-important state of Florida. Bookmaker Paddy Power has Biden at 2/5 to win the election while Trump is available at a much more generous 15/8. The final couple of days before the vote, and the days after it, will likely be highly charged and this volatility will reach across all financial markets. Gold will remain under the spell of the US dollar, and safe-haven flows, and will likely see choppy trading conditions as markets gyrate between risk-on and risk-off.
US Election Coverage – Market Reaction to the Election[3]
The price of gold has dipped recently alongside a small pick-up in US real yields. At the start of the month, gold printed a high of $1,913/oz. while US real yields were negative 95 basis points. Today US real yields have moved 10bps higher to negative 85 basis points while gold has fallen to a current level around $1,884/oz. Gold receives a boost the further US real yields turn negative and the precious metal turns lower if US real yields turn less negative.
Gold’s inverse relationship with the US dollar remains but it is being tested. The weaker US dollar of late has failed to boost the price of the precious metal, while safe-haven flows, another traditional prop for gold, seem to be having a limited effect. The US dollar
