Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Gold Tops $1,900 As Investors Await 2020 Election Outcome

November 3, 2020 at 15:31 by Andrew Moran

Gold futures topped $1,900 again on Tuesday as investors await the 2020 US election outcome. The electoral results between President Donald Trump and former Vice President Joe Biden are not expected to be announced as soon as the polls close amid record voter turnout and mail-in voting. Market analysts are warning any delay in results would affect stock markets since the indicators suggest traders want a response as soon as possible. What does this mean for gold?

December gold futures advanced $9.70, or 0.51%, to $1,902.20 per ounce at 14:10 GMT on Tuesday on the COMEX division of the New York Mercantile Exchange. Gold prices are up more than 25% year-to-date, but experts note that they are unlikely to make any more significant gains since they failed to touch the important $1,920-to-$1,930 range in recent weeks.

Silver, the sister commodity to gold, is also in the green on Election Day. December silver futures tacked on $0.277, or 1.15%, to $24.31 an ounce. The white metal has rallied 36% so far this year, and opinion is split if silver prices could hit $28 by the year’s end.

Bullion prices are gaining support from worries about anticipated delays in election results. Moreover, fears of civil unrest or a contested election are adding to gold futures on Tuesday. The latest polls show that Biden has a significant national lead over Trump, but it is the battleground states that are a lot tighter between the candidates.

Moreover, financial markets are split on what result would benefit equities. A Biden victory would potentially offer short-term stimulus since his administration would likely spend more. A Trump win would possibly maintain the pro-business agenda of the last four years.

While it is not dominating business headlines right now, the Federal Reserve is scheduled to complete its November policy meeting on Thursday. The Fed is widely expected to repeat its message of additional fiscal stimulus and relief to cushion the economic blows from the coronavirus pandemic. Should the central bank also convey more monetary stimulus, it could lead to higher gold and silver prices.

A weaker greenback is contributing to gold’s modest rise. The US Dollar Index, which measures the greenback against a basket of currencies, tumbled 0.72% to 93.45, from an opening of 94.05. A lower buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.

On the data front, factory orders advanced 1.1% in September, up from the 0.6% gain in August, according to the US Census Bureau. The reading is also slightly better than the market forecast of 1%, driven by a rebound in transport equipment, fabricated metal products, and computer and electronic products. This was also the fifth consecutive month of an expansion in factory activity.

In other metal markets, December copper futures picked up $0.0395, or 1.28%, to $3.117 per pound. December platinum futures jumped $8.00, or 0.93%, to $867.50 an ounce. January palladium futures rallied $69.90, or 3.15%, to $2,290.30 per ounce.

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

Leave a Reply