SMM News: during the day, spot gold continued to rise, currently trading below the $1920 / oz mark. At present, Biden leads Trump with a lead of 264PUR 214, and Nevada's vote count is closely watched, but Trump is dissatisfied with the result, suing three states, and the timing of the election result is still unknown. As a result, the Fed may add QE to boost the economy in its interest rate decision on Friday, which investors need to pay close attention to.
Spot gold opened at $1902.85 an ounce on Thursday. As of press time, spot gold temporarily recorded $1917.51 an ounce, an increase of 0.76%.
Market review
[spot gold] within days, spot gold held steady above $1900, the dollar index remained weak, and investors waited for the final results of the US election. Democratic presidential candidate Joe Biden is only one step away from victory, but Republicans are likely to maintain control of the Senate. Both CNN and NBC predicted that Biden had won Michigan, and Wisconsin, another key battleground state he had won, now has 264 electoral votes, just six votes short of the 270th needed to declare victory. Trump currently has 214votes, but the campaign remains tense, and the Trump team has filed lawsuits in at least two states.
During the day, the dollar index fell and spot gold held steady above $1900 as investors waited for the final results of the US election. Democratic presidential candidate Joe Biden is only one step away from victory, but Republicans are likely to maintain control of the Senate. The panic caused by the US election has been sublimated by the fall of the pound against the dollar, uncertainty about the prospects for Brexit and the fermenting news of the epidemic. Analysts at Nomura Securities believe that the Bank of England is unlikely to adopt a negative interest rate policy at today's policy meeting. But the Bank of England is likely to expand its quantitative easing programme by 100 billion pounds. Although negative interest rates are being considered for inclusion in the Bank of England's policy tools, they will not be available until early next year, when the policy is not expected to be implemented.
[crude oil] International oil prices are down 2%, and the US election is still inconclusive, but market expectations of Biden's victory have risen. Rapidan, a US consulting firm, says that if Biden is elected president of the United States, Iran may add 1.8 million barrels of crude oil by the end of 2021. Increasing crude oil production in Iran and Libya makes OPEC's job harder.
Trump filed a lawsuit in three states with dissatisfaction with the results of the vote count.
With the counting results of several swing states coming out one after another, the general election situation in the United States has been greatly reversed, and the red-to-blue turn of the two key swing states has put Democrat Joe Biden only one step away from the White House throne. So far, Biden has won 264 electoral votes, Trump has won 214 electoral votes, Biden only needs to win six more votes to win the election.
But the Trump campaign was unhappy with the result and filed a lawsuit in Georgia asking the state to suspend the counting of votes. This is the third state where the Trump team has filed a lawsuit, following lawsuits against Pennsylvania and Michigan.
According to the Associated Press, the Trump campaign announced legal action in Pennsylvania and Michigan on November 4 and called for a recount in Wisconsin.
"We won a resounding victory in Pennsylvania, but the Secretary of State of Pennsylvania has just announced, 'there are still millions of votes to be counted,'" Trump wrote on Twitter.
Republicans have previously launched legal action in Pennsylvania and Nevada to ensure that campaign observers have smoother access to places where votes are being processed and counted.
Andrew Bates, a spokesman for the Biden campaign, said that legal challenges are not the way to win the election, and that Trump's demand for a recount in backward areas is a meaningless move.
The states that have yet to determine the number of popular votes are: Georgia has 16 electoral votes, Pennsylvania has 20 electoral votes, Nevada has 6 electoral votes, and North Carolina has 15 electoral votes.
According to NBC, Biden currently leads by a narrow margin in the popular elections in Nevada and Arizona. Fox has counted the Arizona vote in Biden's name. That means Biden will win as long as he wins Nevada.
As Biden's chances of winning the election increased, gold prices were boosted, with spot gold hitting as high as $1909.62 an ounce in early trading. Biden is expected to inject a lot of stimulus money to mitigate the impact of the epidemic on the economy. Gold is seen as a hedge against inflation and currency devaluation, and massive stimulus could lead to inflation and currency devaluation.
Us election results delay or force the Federal Reserve to increase its QE to boost the economy
On Friday, November 6, Beijing, the Federal Reserve will announce the interest rate decision, followed by Federal Reserve Chairman Colin Powell at a press conference.
Emanuel (Julian Emanuel), equity and derivatives strategist at BTIG, said the decline in the chances of Democrats taking control of both houses of Congress curbed optimistic expectations of a massive fiscal stimulus as soon as possible, which was an important reason for the sharp fall in Treasury yields. The Fed will not discuss elections. Election-related issues remain unresolved due to uncertain election results in several key states.
Market analyst Patti Domm predicts that Powell may be asked at a news conference about the need for fiscal stimulus, which Congress failed to provide before the election.
Treasuries rose on November 4 as investors reduced the likelihood of a massive stimulus package in the US and turned their attention to the Fed's asset purchase program.
Long-term Treasury yields have fallen sharply as the driving force of fiscal stimulus has slipped, reducing demand for new bonds. The US Treasury announced on November 4th that it would not be biased towards issuing longer-term bonds in the next quarter. Yields on long-term bonds will come under more pressure than short-term bonds. Falling bond yields could limit the effectiveness of any new Fed measures.
In fact, before the election, Powell and his colleagues said more fiscal easing was needed. They also say there is little the Fed can do to boost the economy after years of near-zero interest rates. Fed officials who have made such comments include Fed governor Brainard (Lael Brainard), who is seen as a potential candidate for Treasury secretary in the Biden administration.
But if Congress does not act further, the deteriorating economic outlook could prompt the Fed to review its bond-buying programme, as well as its emergency lending facility for businesses and state and local governments, launched earlier this year.
There is a fierce competition between incumbent President Donald Trump and Democratic presidential candidate Joe Biden, and the market jumps up and down on the news of the election. As the epidemic continues to spread, the economic growth of the United States is slowing, and policy support is urgently needed. But at present, there is a general election in the United States, and as the vote counting dispute in some states is deadlocked, the possibility of short-term fiscal stimulus is reduced, and the Federal Reserve may be forced to increase the QE, dollar index. Gold will be supported.
Institutional point of view: the "blue wave" removes the gold and waits for it to rise.
The gold market remained near the $1900 / oz mark after the shock, waiting for the results of the US election.
George Milling-Stanley, chief market strategist at State Street Global Advisors, said gold prices were at risk in the short term, but the "blue wave" was not a necessary condition for gold prices to rise again.
"the 'blue wave' ensures that gold prices are higher, but the certainty of gold's long-term upward trend has not been affected."
Milling-Stanley said gold will still be a market preference because great uncertainty still revolves around the market.
However, even though the US Senate and House of Representatives may be divided, a new round of US stimulus programs are still expected to be announced soon, which will be hit by the epidemic, and the US economy is under tremendous pressure and is in urgent need of new support.
The next question for investors will be when the stimulus package will emerge and whether it will be enough to support the weak US economy, Milling-Stanley said.
If the two parties continue to fail to reach an agreement, the risk of the United States falling into a new recession will increase.
"the possibility of a double-digit recession is high, which will drive safe-haven buying of gold."
TD Securities pointed out that the biggest risk of this US election is that the result is delayed or the counting of votes is controversial. Of course, if Democratic candidate Joe Biden wins, there will be a bigger boost for gold because it is likely to launch a larger stimulus package. TD Securities also said that investment demand for gold will continue to grow after the uncertainty of the US election dissipates and will continue to push gold prices higher in the long run.
Gold Forecast's Gary Wagner said that if Trump were re-elected, he would probably agree to the previous 180 million stimulus package. If Biden wins, the stimulus will be bigger, but gold will benefit anyway.
Technical analysis
From the daily chart, Loco-London gold breakthrough upward; MACD gold fork, KDJ gold fork, but the upward momentum is not strong. The center of gravity continues to move up, standing on the multi-day moving average, but still under pressure on the resistance of the 60-day moving average. It's just a few dollars from the 60-day moving average of 1920, which could mean a bigger trend. However, if there is no breakthrough, it means to continue to stick, volatility is still limited.
From the 4-hour map, the gold price short-term upward trend, KDJ gold fork is forming, MACD red column expansion is slow, indicating that kinetic energy is declining, there is the possibility of conversion to a shock market, but the price above the multiple moving average, constitute a support, should not choose short intervention, can continue to hold more single, waiting for the market more clear, overall, short risk is significantly greater than the long.
