Gold market focused on US politics and economic developments

Gold moved higher in the most recent daily session but was unable to make a decisive move in either direction. 

Gold traders may be allowing space for crucial fundamental updates to unfold, while in the meantime keeping the precious metal’s movement somewhat subdued. In this report, we will be looking into the most important matters currently and ahead, that could generate volatility for Gold’s price and why I am so focused on Gold and trading Gond nowadays. 

My goal is to keep it as simple as possible to enable traders with minimum understandings of the market to get an idea of what is important and what is secondary when trading Gold. To start with, the major subject currently storming the Media is the US presidential elections. The numerous possible scenarios associated with the results of the elections keep traders on the back foot in our opinion, as each candidate has provided a different plan on how they would deal with the US economy after they are elected.

 The fact that Joe Biden backed by the Democratic party has stated they are willing to print more money to be inserted in the economy, in the form of fiscal stimulus packages compared to Donald Trump’s Republican party, could be a sign that depending on the result of the election, Gold traders may react accordingly.

 In my opinion, the precious metal could go in either direction, in either scenario as the Presidential Election is a major event but does not represent the overall picture as I’ve mentioned in the XM Live Basic Room Session today. The Senate race is also crucial for both the Democratic and Republican parties as its control would enable them to enjoy more political leverage. So, it would be very difficult to determine Gold’s direction with multiple scenarios on the table. However, the event is most probably to create strong market-moving effects and Gold is among the instruments that could come under immense volatility. I would like to advise caution for traders engaging the Gold market, as momentum swings could prevail. However, it was interesting to me that various well known Chinese Banks said they were ready to take action and restrict the trading of precious metals if the US presidential elections are to create strong market volatility. Reading between the lines, this could be a sign that traders are currently anticipating the results and will take action once they have a clear picture of the outcome. 

Moving forward to other financial releases from the US that could prove useful for Gold traders in the following days, we come across the U.S. Federal Reserve’s FOMC meeting on interest rates and its interest rate decision to be released on the 5th of November in the US session.