- Gold fades upside momentum following Friday’s pullback from mid-September high.
- Expected struggle for Biden Presidency, virus woes probe market optimists.
- A lack of major data/events adds to inactivity, risk catalysts keep the driver’s seat.
Gold prices seesaw around $1,951/52 during the initial hour of Monday’s Asian session. The yellow metal began the week’s trading near $1,953.50 while keeping the late Friday’s range between $1,950 and $1,955. The bullion’s recent inactivity could be traced to the uncertainty over the US polity as Donald Trump challenges Joe Biden’s victory in the latest elections. Also, the Republicans’ hold in the Senate offers additional troubles for the recently elected Democratic leader. Further, the coronavirus (COVID-19) and Brexit are additional hurdles for the precious metal buyers.
Old risks join the new ones as US elections are over…
Despite winning US presidential elections, Biden’s hardships aren’t over as Trump has already filed multiple lawsuits citing inappropriate handling of the ballot counting. Not only the ex-President’s effort to block the way to the White House, but the Republican majority in the GOP also questions the Democratic leadership and makes it harder for future decision-making.
Elsewhere, global COVID-19 cases jump over 50 million and the developed economies like the US and Europe have recently been a victim of the wave 2.0. The vaccine is less likely to arrive anytime before 2021 and hence a few more weeks of economic downplay can argue the risk-takers. Biden is up for a covid task force team and will convey the details later today. Traders await hints of further stimulus for fresh risk-on.
Brexit drama offers additional support to the safe-havens other than the politics and virus woes. While the recent update from London, by European Union (EU) Chief Brexit Negotiator Michel Barnier, suggests optimism in handling the key issue, no deal has been finalized even ahead of the key EU summit, scheduled during the mid-November.
Against this backdrop, global equities catch a breather after the stellar run-up during the last week. Though, US 10-year Treasury yields jump back above 0.80%, currently around 0.81%.
Moving on, a light calendar can keep the gold traders directed towards the major market risks, mentioned above, for fresh impulse.
Technical analysis
An ascending trend line from September 21, at $1,953 now, restricts the metal’s immediate upside ahead of September 16 top surrounding $1,973. Though, Friday’s spinning top keeps the sellers hopeful while targeting October 12 high close to $1,933.
