- Gold marks a four-day winning streak, remains slightly bid for around a week high.
- Hopes of more stimulus, supported by expectations of a blue wave in the United States, favor the bulls.
- Initial polls will be the key to follow in Asia.
Gold prices carry bids close to $ 1,909 / 10 during the early Asian session on Wednesday. In doing so, the yellow metal probes the high of a week in the middle of a risk appetite mood. Global markets have recently turned optimistic about expectations of the Democratic Party’s landslide victory in the 2020 US elections. Trade optimism weighs on the US dollar and supports bullion buyers.
Optimists watch a blue wave, but Trump may surprise
The initial forecasts for the 2020 elections in the United States have begun to be known. The recent YouGov suggests a landslide victory for Democratic candidate Joe Biden. Global markets have been anticipating the blue wave, a condition in which Democrats hold the reins in both houses of the United States, mainly because of their preference for easy money.
The risky mood weighs on the dollar, pushing the US dollar index (DXY) to post the biggest losses in more than two months. Since the dollar is inversely correlated with gold prices, the yellow metal benefits from the weakness of the US currency, as it did in recent days.
Market optimism is also reflected in the optimistic impressions of Wall Street and the US Treasury yields. Also, S&P 500 futures print intraday gains of 0.26% after rising for the past two days.
It should be noted that exit polls will start soon and will boost liquidity to the market. Therefore, gold traders must remain cautious. However, optimism regarding a blue wave may keep bulls hopeful.
Technical analysis
Unless it crosses the 50-day SMA near $ 1,914, gold buyers are less likely to target the prior month’s high of around $ 1,934.
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Credits: Forex Street
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