Gold Supported by Uncertain Outcome of US Presidential Elections
Early on Thursday, gold is holding steady amid rising uncertainty about the outcome of the US presidential election and its impact on global financial markets. At the time of writing, GOLD is trading at a little above $1,907.
Both candidates Biden and Trump indicate moving towards a victory, while the trends indicate a possible victory for Biden even as Republicans look set to retain power in the Senate. The market sentiment was further soured after Trump filed lawsuits against vote counting in certain states, effectively contesting the election results.
While the uncertainty is supporting the safe haven appeal of gold in markets, it has also driven the US dollar higher. As we know, the dollar shares a negative correlation with gold, so whenever the reserve currency strengthens, the yellow metal’s prices come under pressure.
Gold also enjoys support from rising expectations that the BOE could be exploring negative interest rates as Britain goes into another lockdown to combat the second wave of the pandemic. Meanwhile, the US saw a lesser than expected increase in private payrolls, according to the ADP report for October, lending a boost to the precious metal.
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