Head-to-head between Biden and Trump – in the end, the winner may be Gold
Source: Economic Events November 04, 2020 - Admiral Markets' Forex Calendar
One of the most anticipated days of 2020 has finally arrived: the US presidential election. First projections show that the race between Joe Biden and Donald Trump is much closer than initially thought and that a final result may still be hours, maybe even days away.
But, the true winner of this election is a member of neither the democratic nor republican party, but the yellow metal: Gold.
Here are some points to consider:
- Price action over the last days already points to potential Gold strength, with the precious metal drifting back to its potential inflection point at around 1,900 USD, a level which has already been recaptured in the last hours
- With last week's US GDP data, it has become clear that the US government, democratic or republican, will have no other choice than to deliver a massive fiscal stimulus package which will be financed with freshly printed US-Dollars
- While the US economy expanded in Q3/2020 by 33.1% (YoY), its biggest expansion ever, GDP is still 3.5% below its pre-pandemic level and the outlook for Q4 and 2021 remains uncertain as the pandemic is far from under control and a vaccine is not yet ready.
While it certainly remains to be seen whether US president Trump accepts his defeat and how he plans to leave office (e.g. by blocking any attempts for a Corona relief package), not only can these uncertainties potentially drive Gold higher, but the final delivery of a relief package can, as well.
All in all, Gold has found itself in a quite positive position for Long engagements, risk-reward wise, about to enter a historically known seasonal bullish window in December and January, which could drive the price for the yellow metal back above 2,000 USD.
Short-term targets and an important region of resistance can be found around 1,930 and 1,975 USD, while breaking the latter could be the initial bullish catalyst that drives Gold up to its current yearly and All Time highs around 2,075 USD or even higher:
Source: Admiral Markets MT5 with MT5SE Add-on Gold Daily chart (between June 20, 2019, to November 04, 2020). Accessed: November 04, 2020, at 05:30 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of Gold fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, and in 2019, it increased by 18.9%, meaning that in five years, it was up by 28%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level than with MetaTrader 4. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.