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  • Silver holding in the bullish territory on an expected Biden victory in the US elections. 
  • A contested election or outright win by the incumbent US President Donald Trump represents the largest risk to the markets.

Silver is currently trading at $24.23 between a range of $23.88 and $24.37, higher by some 0.84% at the time of writing as the markets get set for the US elections.

Finally, it’s election day and a so-called ”Blue-wave” scenario has been priced in as investors anticipate a Democratic sweep Party victory.

The former Vice President Joe Biden winning with Democrats and taking both houses of Congress would indicate that further stimulus is on the way.

It is expected to pressure the US dollar and support demand for precious metals in anticipation of renewed reflationary momentum.

However, a contested election or outright win by the incumbent US President Donald Trump represents the largest risk to the markets and could be especially damaging for precious metals bulls.

It is also worth noting that considering that the markets have priced in a Blue Wave, participants have built-in a sizable short in long-term treasuries. 

Higher rates on a knee-jerk reaction scenario

Analysts at TD Securities explained that while this outcome could see higher rates on a knee-jerk reaction, ”we see several risk mitigants that should see the rise in nominal rates capped, with the Fed in particular willing and able to lend support at low cost by extending the weighted-average maturity of their Treasury purchases.”

”In this context, we would expect real rates to resume their downward trajectory in short order, particularly helping to support gold prices as the dollar simultaneously weakens,” the analysts argued.

Silver levels