XAU / USD regains initial lost ground, flat around $ 1,908-10

• A new USD sell bias helped gold regain traction and move above $ 1,900.
• The latest update showed that Trump’s lead has shrunk in Michigan and has hit the dollar.
• A modest rally in equity markets could undermine capitalization gains and safe-haven gold.

The gold managed to regain ground initially lost in the $ 1,882-81 zone and has now moved close to the two-week highs set earlier this Wednesday.

The surge of some new selling around the US dollar helped the dollar-denominated commodity attract some buying on the dips to lower levels and pull back above the $ 1,900 mark. The dollar began to lose ground after Reuters reported that incumbent President Donald Trump’s lead has shrunk in the key state of Michigan.

The latest update to Wisconsin’s tally showed that Democratic challenger Joe Biden now has 49.5% of the vote versus Trump’s 48.8% of 97% of the expected votes counted so far. Yet Trump still has a 700,000 lead in Pennsylvania, although there are still more than 1.4 million absentee votes in the state to count.

On the economic data front, the ADP report showed that private sector employers added less than expected 365,000 jobs in October compared to the prior month’s revised upward reading of 753,000. However, the data made little difference, as US political events turned out to be a unique driver of USD price dynamics.

Meanwhile, a turn in the tide in favor of Biden boosted investor confidence. This was evident by a good rally in US equity futures, which could undermine demand for traditional safe-haven assets and keep any runaway rally in XAU / USD limited, at least for now.

The US economic agenda on Wednesday also highlights ISM’s services PMI release, although it is unlikely to change the rules of the game or generate significant trading opportunities around gold.