December gold futures last traded at $ 1,955.40 an ounce, up 0.19% on the day.
The modest gains in gold after the market opened on Sunday night comes as Democratic candidate Joe Biden continues to secure his place as president-elect. Although some states did not release their official tally from last week’s election, Biden got enough votes to win the White House race, according to media reports.
Although Biden continues to solidify his place in history, garnering the most votes for an American president, many political experts have said the next few weeks will be filled with uncertainty, as President Donald Trump should not give up without giving up. beat. He has already taken legal action in various states in an attempt to alter the results.
According to many commodities analysts, two factors will continue to support gold prices. First, a Biden presidency – even with a divided Congress as Republicans seek control of the Senate and Democrats hold the House – should lead to more stimulus. The second factor is that the current political crisis will stimulate demand for safe haven gold.
These two factors will also continue to weigh on the US dollar as it sits near a two-month low. Analysts have said that the US dollar will be critical to the future path of gold, up or down.
“With recounts and lawsuits, we could be months away to find out who the next president will be. This, I think, will weigh on the dollar. Because there is so much uncertainty in the United States, I think you must be golden ”. Darin Newsom, president of Darin Newsom Analysis, said in a recent interview with Kitco News.
Besides politics, many analysts also expect economic uncertainty to weigh on the dollar and provide renewed support for gold. Last week, new records of COVD-19 infections in the United States were recorded, more than 10 million people across the country were infected, and health officials said it would only do to get worse.
Many analysts and economists have said the pandemic will weigh on economic growth as the new year approaches.
Ole Hansen said with the expected political deadlock on Capitol Hill, markets will start to look to the Fed for more leadership on the economy.
“Any further stimulus from the Fed will push up gold prices,” he said. “This appears to be the catalyst that could push the price of gold to $ 2,000 an ounce by the end of the year.
Not only do analysts see strong fundamental support for gold, the market has made significant technical moves as prices hold near a six-week high.
Marc Chandler, managing director of Bannockburn Global Forex, said gold broke a significant downtrend line; however, he added that gold’s return to all-time highs remains hollow.
« [Gold is] not quite out of the race and a new $ 2000 challenge. First, it needs to overcome the $ 1962 area, which is halfway down from the high in early August, then the retracement (61.8%) near $ 1989.
Analysts at Murenbeeld & Associates said the lack of a blue wave in the U.S. election changed some bullish expectations for gold prices as the new year approached.
“The election results are not yet anchored in the plinth, but as it stands, we expect a smaller budget package than some (maybe even the Fed) had hoped, and we expect increased pressure on the Fed to consider other monetary options in the country. case the economy stutters, ”analysts said in the company’s weekly report.
The company said it sees gold prices ending the year between $ 1,960 and $ 1,980 an ounce.
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