News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.31%, while traders in NZD/USD are at opposite extremes with 66.78%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/k2e06fEjoh
  • ECB Pre-Commits to More Stimulus: ECB’s Lagarde had stated that the GC were in agreement that given the current backdrop, risks were clearly tilted to the downside. Get your market update from @JMcQueenFX here:https://t.co/KPjoDcQ0D0 https://t.co/vV1nprDCKL
  • Watch @PeterHanksFX, @DailyFX Equity Analyst covering the Earnings live - https://t.co/cpf5s3UvUn
  • Wow. Amazon blows out its EPS $12.37 vs $7.37. Google did $16.40 against $11.42. Even Facebook $2.71 versus $1.91. @PeterHanksFX talking about it now: https://t.co/37dmgWZQhn
  • Facebook Earnings: EPS $2.71 vs est $1.91 Revenue $$21.47B vs est $19.84B $FB
  • Alphabet Earnings: EPS $16.40 vs est $11.42 Revenue Ex-tac $38.01B vs est $35.35B $GOOG
  • Amazon Earnings Q3 EPS $12.37 vs est $7.37 Revenue $96.1B vs est $92.71B $AMZN
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.71% France 40: 0.45% Germany 30: 0.41% US 500: 0.05% Wall Street: 0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/9I7hxzLRLd
  • Bruno Le Maire, France's Finance Minister, sees economic growth -15% during second coronavirus lockdown -BBG
  • US equity indices letting out some air since ripping higher in afternoon trade. Eyes on earnings from Apple, Amazon, Facebook, and Google due after-hours. $NDX: +2.54% $SPX: +1.60% $DJI: +0.94% https://t.co/itdInUjTLR
Gold Price Outlook Dictated By Presidential Polls, Fiscal Aid Hopes

Gold Price Outlook Dictated By Presidential Polls, Fiscal Aid Hopes

2020-10-09 20:00:00
Daniel Moss, Analyst
Share:

Gold Fundamental Forecast: Neutral

  • Fading fiscal stimulus hopes may weigh on gold prices in the near-term.
  • However, the rising likelihood of a Joe Biden presidency could underpin the liquidity-driven precious metal ahead of the US Presidential Elections in November.
Gold Forecast
Gold Forecast
Recommended by Daniel Moss
Get Your Free Gold Forecast
Get My Guide

As mentioned in previous reports, Donald Trump’s unexpected decision to pull the plug on fiscal stimulus negotiations could undermine gold prices in the near-term, as the President tweeted “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business”.

Of course, President Trump has softened his stance in recent days, allowing talks between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi to continue, albeit the probability of additional fiscal aid this side of the US Presidential Elections on November 3 seems relatively slim.

Speaker Pelosi remains vehemently opposed to approving singular aid packages stating, “there is no stand-alone bill without a bigger bill” while Senate Majority Leader Mitch McConnell believes that “the speaker insists on an outrageous amount of money”.

This breakdown in negotiations may concern Chairman Jerome Powell and the Federal Reserve given the minutes from the Federal Open Market Committee’s (FOMC) monetary policy meeting in September showed that the central bank believes that the absence of “an additional pandemic-related fiscal package” could see growth “decelerate at a faster-than-expected pace in the fourth quarter”.

Gold Price Outlook Dictated By Presidential Polls, Fiscal Aid Hopes

Data Source – Bloomberg

However, gold prices seem somewhat unfazed by these developments, which suggests that the market may be discounting the incumbent President’s remarks given Mr Trump trails his Democratic challenger Joe Biden in the polls by the widest margin since late June and holds double the deficit he had against Hillary Clinton at the same point in 2016.

In fact, recent price action could be indicative of a market pricing in a Biden presidency, which is expected to bring with it substantial fiscal stimulus if the Senate flips to a Democratic majority.

The notable turn higher in inflation expectations appears to coincide with the former Vice President’s surge in the polls and could be behind gold’s resilience in the face of fading fiscal stimulus hopes.

Therefore, although the absence of additional fiscal aid may weigh on the price of Bullion in the near-term, the growing likelihood of a Biden win in November could see market participants begin to price in a more extensive government support package and in turn put a premium on the liquidity-driven precious metal.

Gold Price Outlook Dictated By Presidential Polls, Fiscal Aid Hopes

Data Source – RealClearPolitics, Bloomberg

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

Gold Forecast
Gold Forecast
Recommended by Daniel Moss
Get Your Free Gold Forecast
Get My Guide

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES