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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
More View more
Real Time News
  • USD hegemony is at risk thanks to changes in the global economy and the long-term consequences of the US-China trade war. Get your market update from @CVecchioFX here:
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge:
  • The formation of several bullish technical patterns suggests that the haven-associated Japanese Yen is at risk of further losses against the Euro and Australian Dollar. Get your market update from @DanielGMoss here:
  • Natural gas is moving lower after weather models pointed to warmer-than-average temperatures across much of the US. Get your market update from @FxWestwater here:
  • Gold and silver prices may continue to rise in the coming months on the back of falling real rates of return and the prospect of additional fiscal support under a Biden administration. Get your market update from @DanielGMoss here:
  • Will the Swiss Franc find reprieve after recent losses against the Canadian and New Zealand Dollars as NZD/CHF and CAD/CHF uptrends face key chart barriers? Find out from @FxWestwater here:
  • The Australian Dollar may be at risk of losses against the New Zealand Dollar after an unexpectedly high NZ inflation reading sent AUD/NZD towards challenging short-term rising trend support. Get your $AUD market update from @ddubrovskyFX here:
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here:
  • The gold price rebound keeps XAU/USD within the confines of the August downtrend. From a trading standpoint. Get your $XAUUSD market update from @MBForex here:
Gold Price Coils Up Ahead of Election on Improved Sentiment, Weaker USD

Gold Price Coils Up Ahead of Election on Improved Sentiment, Weaker USD

Margaret Yang, CFA, Strategist


  • Gold prices climbed for a third day to US$ 1,890 as traders counted down to the election
  • The precious metal price was buoyed by improved market sentiment and a weaker US Dollar
  • 81% of the retail gold traders (within IG)are net long gold, in anticipation for a Democratic sweep

Gold prices rebounded from a key support level of US$ 1,870 amid favorable market sentiment as traders counted down to the US election. As recent polls have suggested, many are anticipating a potential “Blue Wave” - a Democratic sweep – election outcome, which is likely to support risk assets and sink the US Dollar. If Biden wins, the Democrats may be empowered to push through a larger fiscal bill at the expense of a wider deficit, which may lead the US Dollar to fall. With a new Covid-19 viral wave hitting the US and most parts of the EU, a massive relief packages seems needed to cushion the pandemic’s impact.

In view of a historic negative correlation between gold and the US Dollar (chart below), a “Biden-win” scenario will likely sink the US Dollar and buoy the precious metal prices. The opposite is true if Trump beats Biden – a less likely outcome that may result in a stronger US Dollar and weaker gold prices.

Gold Price Coils Up Ahead of Election on Improved Sentiment, Weaker USD

Source: Bloomberg, DailyFX

The medium-term outlook, however, appears biased towards the upside as global central banks continue to expand their balance sheet. Systemically important central banks, including the Fed, ECB, RBA and BoE, may lean toward the dovish side against the backdrop a slower pace of economic growth in Q4 as a second Covid-19 viral wave hits the US and the EU. Ample liquidity and an ultra-low interest rate environment could stay with us for a longer period of time, which may provide support to precious metal prices.

The Federal Reserve balance sheet hit a record high of US$ 7.177 trillion in late October, and the trend showed no sign of reversing any time soon (chart below).

Gold Price Coils Up Ahead of Election on Improved Sentiment, Weaker USD

Source: Bloomberg, DailyFX

Technically, gold prices came off the all-time high (US$ 2,075) in early August and have since entered a three-month pullback. Prices are consolidating within a tight range between US$ 1,870 to $1,930 in the past four weeks (highlighted in chart below). An immediate support level can be found at US$ 1,870 (the 76.4% Fibonacci retracement), breaking below which may open room for further losses with an eye on US$ 1,810.

The overall trend appeared to be bearish-biased, with a “Death Cross” likely formed recently. The 20- and 50-Day Simple Moving Average (SMA) lines have crossed below the 100-Day SMA, signaling that downward pressure might be prevailing. Immediate resistance levels can be found at US$ 1,898 (20-Day SMA), US$ 1,910 (61.8% Fibonacci retracement) and then US$ 1,930 (upper ceiling of the range).

Gold PriceDaily Chart

Gold Price Coils Up Ahead of Election on Improved Sentiment, Weaker USD
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -2% -18% -5%
Weekly -12% 22% -7%
What does it mean for price action?
Get My Guide

IG Client Sentiment indicates that retail gold traders are leaning heavily towards the long side, with 81% of positions net long, while 19% are net short. Traders have trimmed long (-2%) positions and added short (+16%) bets overnight. Compared to a week ago, traders have reduced both long (-3%) and short (-10%) exposure.

Building Confidence in Trading
Building Confidence in Trading
Recommended by Margaret Yang, CFA
Don’t give into despair, make a game plan
Get My Guide

--- Written by Margaret Yang, Strategist for

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

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