Gold

The gold market saw a let rally last week, with the gains on Friday helping price reverse earlier losses and end the week in the green. The rally came amidst a sharp sell-off in the US Dollar. The global reserve currency is under pressure amidst increasing political uncertainty ahead of the US elections. Polls continue to show Biden comfortably in the lead by around 11% - 14%. Biden’s lead has grown over Trump since the first US presidential debate which, although messy and chaotic, was largely seen as a win for Biden. Trump subsequent COVID-19 diagnosis, as well as his handling of the illness, have also seen the president’s ratings fall with many criticising Trump over his callous response to the virus which continues to kill so many in the US, as well as globally.

While the sell-off in the US Dollar has helped keep gold prices supported, the precious metal remains off the all-time highs posted in August as the strong rally in equities is having an off-setting effect. Still, with the Fed committed to keeping rates on hold until 2023 and with the growing downside risks around the second wave of the virus, gold prices look likely to continue to derive safe haven support, particularly as US political uncertainty keeps the Dollar pressured.

Silver

Silver prices have started the week in the green as the sell-off in the US Dollar and the rally in equities prices combine to keep price supported. The rally in equities prices is particularly supportive of silver prices. Industrial stocks and indices have been buoyed by still-firm manufacturing results over recent months. However, there are concerns that momentum is waning with recent readings showing much lower levels of monthly growth. The prospect of fresh lockdowns is also a big downside risk to silver demand and traders will continue to closely monitor incoming headlines around the pandemic.

Technical Views

GOLD (1979.25)

From a technical viewpoint. Gold prices have now broken back above the bear channel top following the rally off the 1858.28 support. While above here, the focus is now on a test of the 1979.25 level and the continuation of the longer-term bullish trend.

SILVER (Bullish above 25.0756)

From a technical viewpoint. Having found support at a test of the bearish channel low, silver prices have since rallied and broken back above the 25.0756 level. While above here, the near-term view remains bullish with the 27.3955 level (structural resistance and bear channel top) the next key obstacle for bulls.

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