Gold gained for three straight days as polls showed Joe Biden leading for months. Gold prices moved higher again Tuesday near the 50-day moving average of 1914. Support is near the 10-day moving average of 1896.
The US Presidential race was much tighter than expected and remains undecided as ballots continue to be counted. Democrats won the House and the Senate is too close to call, but leaning Republican. If Republicans win the Senate, gold may stabilize. If Democrats win the Presidency,
House and Senate, gold will likely soar with expectations that the cash register will open for an economic stimulus package. The “Blue Sweep” scenario looks unlikely though.
This is a big week for US news releases; everything is not about the election. Today has the ADP employment change along with trade balance and five different ISM Non-Manufacturing releases.
Thursday has continuing jobless claims. The previous jobless claims from last month came in at 7756K. Thursday’s forecast is 7200K.
Later, the FOMC interest rate decision will be announced. If that were not enough, Friday is Non-Farm Payroll day. This is a big week for the USD. Although we have witnessed the rise of gold lately, the main trend is still down. Gold must make a move through 1936 to change the trend to the upside. A move below 1889 will confirm the present downtrend.
Gold Key levels
Support: 1892.03, 1877.81, 1868.51
Resistance: 1915.55, 1924.85, 1939.07
For the moment though, the Presidential election decision will be the first market mover for gold. The election is too tight to call and subject to violent moves. As the day and hours go on, we will get more clarity. A lot of mail-in ballots have to be counted today. Statistics show 70% of mail-in voters favour Democrats, making it an even more exciting story.