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Gold Rises Above $1,950, Silver Logs Gains on US Election Results

November 5, 2020 at 21:45 by Vladimir Vyun

Gold climbed above the $1,950 level (though it has retreated slightly below that level by now) and silver logged huge gains today. Platinum and palladium also demonstrated solid rally, and copper rose as well.

The Federal Reserve concluded its two-day meeting on Thursday. Usually, Fed’s comments draw the attention of traders but that was not the case today as markets were focused on the results of the US presidential election. And the Fed changed neither its monetary policy nor the language of its statement, making the policy announcement a non-event.

Instead, all the attention was concentrated on the news about the US election. Not all votes have been counted yet but so far it looks like Democratic candidate Joe Biden will win the race. He is considered a more positive candidate for markets than his rival incumbent President Donald Trump, therefore his lead put markets in a risk-on mode. Some analysts are surprised how certain markets seem to be in Biden’s victory considering that the election is likely going to be the tighest in history. Furthermore, Trump’s campaign is planning to legally challenge the outcome if he loses the election. Other analysts pointed out that whoever wins will have to approve additional stimulus to the economy, and that is a good reason for the market’s optimism.

Traditionally, gold was considered a safe haven, and good news was hurting the metal. But lately, the US dollar was the preferred destination for investors seeking safety. Because of that, the greenback dropped due to risk appetite prevailing on markets. And that allowed gold, which usually trades inversely to the US currency, to gain.

Futures for delivery of gold in December rallied by $53.4 (2.82%) to $1,949,6 per troy ounce as of 21:43 GMT on COMEX today. Contract for silver soared by $1.54 (6.45%) to $25.44 per ounce. Spot price for platinum climbed by $26.03 (2.99%) to $897.83 per ounce, and palladium jumped by $89.17 (3.88%) to $2,384.54 per ounce. Copper for delivery in December rose by $0.0085 (0.27%) to $3.1155 per pound.

If you have any questions and comments on commodities today, use the form below to reply.

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