Gold has bounced in a $20 range since the end of October. Discounting the drop on Oct. 31, which we believe was fund selling to grab some profits for client-statement purposes to offset losses in the equity space, gold has remained in a very tight range.
Good economic numbers on Friday helped to strengthen the dollar, but gold remained resilient into the weekend.
The technical picture remains neutral unless gold can close above the $1,337 level, which it has attempted twice. Support rests at $1,220 and given overnight dollar action, we would be inclined to suggest a retest of this level, but think the market is likely to remain bid ahead of tomorrow’s election, with support around the $1,227 area.
Should the Democrats surprise, we would expect pressure on the dollar and a move higher in the metals complex. Republican control of the both the House and Senate should create selling pressure.
Source: Kitco News