Gold Market Update: Shoots Above $1,950 Marking A 7-Week High
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- Gold starts green in today’s session achieving a 7-week high after its highest daily increase in 6 months.
- As Democratic candidate Joe Biden leads the polls, investors remain uncertain and cautious ahead of the weekend.
Gold is trading to the upside in today’s market session as the US dollar has weakened. The move in the precious metal marks a 7-week high as previously Gold climbed over $1,950 on Sep 21 reaching a high of $1,955. Currently, the yellow metal is trading at $,1955 enjoying the support of Gold bugs with a high of $1,957 and an intraday low of $1,935.
The climb today is also a follow-up of yesterday’s rally when Gold jumped from $1,902 to $1,952 or a 2.62% increase, its biggest one-day jump in six months. Strong risk appetite across the asset classes also played a positive role for Gold’s rally yesterday along with equities. Equities, however, trade to the downside in Europe, and US equity futures point to a lower open while Gold seems to keep the momentum to the upside.
As Covid-19 Cases Grow, Fed’s Jerome Powell Announced Rates Will Remain Unchanged
Gold maintained its resiliency after yesterday’s Fed monetary policy meeting. Fed Chairman Jerome Powell announced the Federal Reserve is keeping the interest rate unchanged at 0.25%. While promising to sustain maximum employment and price stability as the Covid-19 pandemic continues to reign. Additionally, Powell warned that the US will continue to experience the negative effect of the pandemic on the economic activity as risks remain in the near to mid-term outlook. He also assured the markets that the rate will remain near zero until labor market conditions improve substantially.
Later, the US dollar resumed its decline broadly as the dovish comments by Chairman Powell weighed on the Greenback. The EUR/USD marks the fourth day of consecutive gains today trading at 1.1872, starting the week at 1.1649.
Risk appetite in the global markets seems off the table. Investors prepare to enter the weekend without a decision on the US Presidential election. The latest standings point to Joe Biden keeping his lead as the counting is drawing near to announce concrete results. Of the remaining states, Joe Biden is ahead in Nevada, Arizona, and recently Georgia. While Trump has the advantage in Pennsylvania, North Carolina, and Alaska.
What’s Next for Gold?
The price dynamics of Gold may be subjected to heightened volatility as we head into a weekend of uncertainty where we may hear the announcement of the 46th President before the markets open on Monday.
On the technical front, Gold has breached the 200-day moving average long ago, in March, and only yesterday pierced through the 50SMA while overtaking the 100SMA a few days ago. The precious metal remains in a strong uptrend in the long term with price climbing steadily for the better part of the last two years. In the medium term, the price has consolidated in the range of $1,850 to $1,960.
The economic calendar today has to offer us the most important data of the month, the Non-farm payrolls, and the unemployment data scheduled for 13:30 GMT. Analysts’ expectations point to 600K new jobs created for the month of October compared to 661K for September. The unemployment rate is expected to reach 7.7% in October, down from 7.9% in September.
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