Updated: Nov 19, 2020
Gold had the biggest weekly gain since July and copper rose as Joe Biden tightened his grip on the race for the White House, while investors also weighed prospects for further Federal Reserve stimulus. Bullion broke out of a narrow trading range seen over the past month as uncertainty over the U.S. election and renewed stimulus hopes boosted demand for the haven. Democrat Joe Biden has taken the lead in Pennsylvania over President Donald Trump, putting him on the cusp of victory in the presidential race. Bullion gave up some of the early advances as “stocks have come off highs and the dollar is making a modest comeback. There also seems to some notable profit-taking that started around $1,960,” said Tai Wong, head of metals derivatives trading at BMO Capital Markets.
The market is looking for an increased likelihood of a Biden victory, and a stimulus package -- albeit rather a modest one compared to a blue wave scenario -- might be still in the horizon, according to Wenyu Yao, senior commodities strategist at ING Bank. With the Fed to stand behind the curve, given its new average-inflation targeting framework, this is leading to low or lower real rates. Investors would still like to add gold into the portfolios, she said. Fed Chair Jerome Powell opened the door to a possible shift in the central bank’s bond purchases in the coming months, saying that more fiscal and monetary support is needed. The Fed kept its stimulus steady at its meeting this week, but a Republican Senate hamstringing government aid efforts may force it to step up and fill the gap soon. The U.S. unemployment rate fell more than expected in October, dropping to 6.9%, according to a Labor Department report Friday. Spot gold rose 0.1% to close at $1,951.35 an ounce, after gaining as much as 0.6%. That extended this week’s gain to 3.9%. The Bloomberg Dollar Spot Index declined 0.3%.
Is it heading for $2000? Will Silver follow? #insiderkk