Precious gold hits 1-1/2 months trough as Dollar drools on Biden victory

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Precious gold hits 1-1/2 months trough as Dollar drools on Biden victory

On Thursday, the precious yellow metal, spot gold futures’ prices snowballed as much as 2.5 per cent to wind up the session just a notch shy of $1,950 an ounce, as a likely victory for Joe Biden in Tuesday’s US Presidential election had spurred up hopes for larger relief packages that in effect had poured cold water over the American currency and led to an assiduous rally for a gauge of global stocks’ indices.

On top of that, an unchanged policy stance of US Federal Reserve following a two-day meet of the policymakers had drooled the American currency further, aiding the cause of gold futures’ prices. In tandem, prospects of a Republican-led Senate alongside a Democrat-controlled House had mooted the possibilities of further upward momentum for the spot gold futures’ prices.

Nonetheless, a mass-scale sell-off wave for the US Dollar on Thursday’s FX market had been the major market mover for the precious yellow metal.

Gold surges 2.5 per cent as US Dollar Index plunged to three-week lows

Citing statistics, on Thursday’s commodity market closure, spot gold futures’ prices had wrapped up the day 2.5 per cent higher to $1,949.17 after hitting above a key resistance level of $1,950 per ounce in early US trading hours.

Among other precious metals, silver futures’ prices gained more than 6 per cent to wrap up the day at $25.27 an ounce, while platinum added 2.6 per cent to $892.26 an ounce and palladium futures’ prices climbed 4.8 per cent to wind down the day at $2,399.36.

Meanwhile, referring to the broad-spectrum fundamentals of a slowing US economy which has been in dire need of further Government stimulus amid a steep lack of liquidity, a Standard Chartered analyst Suki Cooper said on the day’s commodity market round off, “Beyond the U.S.

election, the broader macro backdrop remains supportive of elevated gold prices given our expectations of further dollar weakness, real rates remaining negative and further stimulus. Gold price risks stem from the fiscal stimulus negotiations, the Fed response as the FOMC could face a steepening yield curve if the election points to significant fiscal stimulus, and vaccine developments in response to COVID-19.