Good morning traders,

The gold prices closed at 1,902.96, after placing a high of 1,916.37, and a low of 1,880.79. Prices for the precious metal initially fell on Wednesday, but then turned up again during the late trading session.The blue wave expectations faded away from the market on Wednesday, when the hopes for a larger US coronavirus stimulus package declined after the traders start betting that the Democrats will not take control of the US Senate in the disputed election.

Market participants hoped for election certainty, but the results have not yet been announced, and it seems like the recounts and lawsuits will continue over the next couple of days. This process will be dragged out, as many states have different rules for mail-in ballots and recounts. All this uncertainty supported the US dollar and weighed on the precious metal.

Late on Tuesday night, when it was still unclear who was going to win, President Trump falsely claimed victory, although millions of votes had not yet been counted in the tight presidential race. This raised the safe-haven sentiment, and the US dollar gained from this, dragging the gold prices down by more than 1% on the day.

The markets were hoping to get a larger stimulus package after the elections, but the expectations that the Senate will remain in the hands of the Republicans, rather than going to the Democrats, rose, increasing the likelihood of a divided government.

Biden was expected to deliver a larger US coronavirus package, and after the hopes for a clear victory for him faded away, gold started losing ground, as it is considered a hedge against inflation and currency debasement. However, the path for gold is still relatively high, but a strong US dollar could be a hurdle. The risks of a contested election are high, which will provide some short time support to gold prices. The bulls were disappointed, but they still have some hope left, as a divided Congress will force the Fed to do more for much longer.

On the data front, at 18:15 GMT, the ADP Non-Farm Employment Change figures for October showed a decline to 365K, against the projected 650K, weighing on the US dollar and capping further losses in gold. At 18:30 GMT, the Trade Balance from the US for October came in as expected, at -63.9B.

At 19:45 GMT, the Final Services PMI for October rose to 56.9 from the estimated 56.0, lending support to the US dollar and adding to the losses for the yellow metal. At 20:00 GMT, the ISM Services PMI figures for October indicated a decline to 56.6, from the expected 57.4, putting pressure on the US dollar and ultimately capping any further losses in gold on Wednesday.

Daily Technical Levels
Support             Resistance
1,894.60           1,919.20
1,878.80           1,928.00
1,870.00           1,943.80
Pivot Point:     1,903.40The precious metal, gold, is trading within the 1,905 range, facing strong resistance around the 1,910 level, extended by a triple top pattern on the 4-hour timeframe. On the lower side, the gold price could dip until levels around 1,892 and 1,884, while a bullish crossover at the 1,910 level is likely to open further room for buying until 1,919 and 1,926. Election results may drive some price action. Good luck!