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With the US election outcome still elusive, although titling towards a Joe Biden presidency, gold (XAU/USD) firmed on Thursday. Technicals and the US election limbo favor the yellow metal ahead of the FOMC monetary policy decision, FXStreet’s Dhwani Mehta reports.

Key quotes

“Global markets cheered prospects for a Biden win, implying a bigger stimulus package and no higher taxes. However, the Republicans look to retain the Senate on Biden at the White House. A split Congress could likely bring no end to the fiscal gridlock. The market nervousness is seemingly boding well for the traditional safe-haven gold, as the final results are eagerly awaited from the key swing states.”

“Gold traders also await the US Jobless Claims data and the FOMC monetary policy decision for a fresh direction on the yellow metal. The Fed is likely to hold its stance on the easy policy, assessing the implications of the US election and the coronavirus resurgence.”

“The bullish case is backed by the hourly Relative Strength Index (RSI) inching higher at 56.58 while within the positive zone. Also, the 21-hourly moving average (HMA) and 50-HMA bullish crossover adds credence to the further upside.”

“The next stop for the bulls is seen at Wednesday’s high of $1916.50, above which the $1920 hurdle will get tested.”                                   

“To the downside, the upward-sloping 21-HMA at $1903 is immediate support. A breach of the last could put the $1900 level back at risk. Further south, the confluence of the 100 and 200-HMA at $1893 is the level to beat for the bears.”