Gold supported by bullish 5-week SMA ahead of US elections

• The ascending (bullish) 5-week SMA is capping the downside in gold.
• The yellow metal has charted a bullish pattern on the 1-hour chart.
• A Democrat majority in both houses could bode well for the safe haven metal.

Gold is currently trading at $1,230/Oz, having created a doji-like candle yesterday.

While the daily chart is signaling a lack of clear directional bias, the ascending 5-week and 10-week SMA are indicating that the path of least resistance is on the higher side. The bullish weekly outlook would gain credence if the metal moves above $1,234, confirming a bull flag breakout on the 1-hour chart.

The resulting gains, however, could be short-lived, if Republicans secure a majority in both houses. That would embolden Trump to push for more aggressive policies on fiscal and trade front, although the room for a further fiscal splurge is limited, as the fiscal deficit has already ballooned significantly.

On the other hand, Democrat victory in both houses could pave way for political turmoil in Washington. Thus, stocks could respond negatively to a Democratic victory, sending the safe-haven metal higher.

Gold Technical Levels