- Some renewed USD selling bias assisted gold to regain traction and move above the $1900.
- The latest update showed Trump’s lead has narrowed in Michigan and weighed on the USD.
- A modest uptick in the equity markets might undermine the safe-haven gold and cap gains.
Gold managed to recover the early lost ground to the $1882-81 region and has now moved well within the striking distance of two-week tops set earlier this Wednesday.
The emergence of some fresh selling around the US dollar assisted the dollar-denominated commodity to attract some dip-buying at lower levels and move back above the $1900 mark. The greenback started losing ground after Reuters reported that the incumbent President Donald Trump’s lead has narrowed in the key battleground state of Michigan.
The latest count update from Wisconsin showed that Democratic challenger Joe Biden now has 49.5% votes as against Trump’s 48.8% of the 97% expected votes tallied so far. However, Trump still holds a lead of 700,000 in Pennsylvania, though there are still more than 1.4 million absentee ballots yet to be counted in the state.
On the economic data front, the ADP report showed that private-sector employers added less than expected, 365K jobs in October as compared to the previous month’s upwardly revised reading of 753K. The data, however, did little to influence, with the US political developments turning out to be an exclusive driver of the USD price dynamics.
Meanwhile, a shift in the tide back in favour of Biden boosted investors’ confidence. This was evident from a goodish pickup in the US equity futures, which might undermine demand for traditional safe-haven assets and keep a lid on any runaway rally for the XAU/USD, at least for the time being.
Wednesday’s US economic docket also highlights the release of ISM Services PMI, though is unlikely to be a major game-changer or produce any meaningful trading opportunities around gold.
Technical levels to watch
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