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  • Gold traders await the US mid-term elections on Tuesday in anticipation of dollar weakness to fuel next leg of gold’s upside.
  • Gold is trading within the familiar wider range between $1,212-$1,237.

Gold continues to trade within familiar ranges as investors  move in and out of risk associated assets depending on levels of volatility and risk appetite. The greenback has been a major contributor to the sustainability of the recent rally in Gold that came of the stock market rout and global growth concerns. However, gold requires further clarity in recent events and ongoing risks if it is going to be able to break out of the 1212/37 recent range. The US elections might just offer one piece of the puzzle depending on the outcome.  

Midterms and trade angst could be a double whammy for Gold bulls

The markets have presumed ongoing stimulus from the Trump administration which has been a major contributor to the greenback’s strength but it appears that we may see the Democrats take The house which would presumably be disruptive to Trump’s fiscal agenda and subsequently dent the greenback and US stocks and potentially give gold a boost and considering how well it has fared despite the resurgence of the dollar to the 97  handle  in the DXY shows that there is general risk-off demand for it.  

Trade wars are an additional variable and there is a feeling that Trump’s recent hype over a truce may have just been a tactical ploy to win votes heading into tomorrows congressional midterm elections – A subsequent void of positive headlines surrounding trade on the lead up to the G20 on 26. Nov’ could be an additional crutch that falls away from under the dollar and such uncertainties  should play into the hands of the gold bulls as well.

Gold levels

A break of $1237 (key pivot area) opens $1243 (Oct. 26 high) and then $1250 (psychological level) and the July high $1,266.    Daily RSI is in bullish territory in line with the rise in mid-August  and September’s business.  However, is bears can get below the 21-D SMA, the 30th Oct stick’s lows at $1,212 come as the key downside target ahead of the $1,201 50% retracement.