It has been a quiet U.S. session as political and stimulus uncertainties are taking center stage. Just over the halfway point of the Wall Street trading day, the DJIA DOW (+80), S&P 500 SPX (+22), and NASDAQ (+50) are all slightly positive. Thus far, doubts over stimulus, the election, and economic recovery are limiting participation.

In a surprise move, President Trump has called off comprehensive COVID-19 stimulus negotiations until after the election. Instead, Trump has urged Congress to pass a stand-alone bill issuing Americans a second $1200 direct cash payment. While this is a far cry from the $2 or $3 trillion asked for by many in Congress, the markets are viewing it as a step in the right direction. At press time, it remains extremely unclear whether the stand-alone bill will come to pass.

On the political front, more fireworks have hit the newswires today. Earlier, President Trump withdrew from the second Presidential Debate scheduled for next week. In response to the debate commission making the town hall-style event a virtual one, Trump stated: “I am not going to do a virtual debate. I am not going to waste my time on a virtual debate.” This is an interesting development, as Real Clear Politics polling data has Trump behind in all of the contested battleground states.

Right now, the markets are in a holding pattern as uncertainties over stimulus and politics grow.

Gold Beneath 1900.0 Amid Stalling Stimulus Negotiations

December gold futures are trading in a tight daily range beneath 1900.0. At this point, traders are hesitant to take on fresh longs as Congress attempts to hammer out a stand-alone stimulus bill.

Here are the key levels to watch in this market ahead of the weekend break:

• Resistance(1): Bollinger MP, 1913.6
• Support(1): Double Bottom, 1851.0-1851.1

Bottom Line: If we see a stimulus bill gain Congressional approval in the coming hours, a bearish break in gold may be in the cards. Until elected, I’ll have sell orders for December gold in the queue from 1850.9. With an initial stop loss at 1853.4, this trade produces 25 ticks on a standard 1:1 risk vs reward ratio.