Gold is pretty much becoming part of the anti-dollar trade when it comes to the election now, with stimulus bets potentially called off should Biden win the White House.
The weakness in the dollar in the past hour has helped gold get a decent lift back above $1,900 now as buyers keep a defense of the 100-hour MA (red line) earlier to now push back above the 200-hour MA (blue line).
As such, they now hold a more bullish near-term bias in the pair as we await further clarity from the election results. But with Michigan also starting to turn after Wisconsin did, Biden may very well pip it at the end of the day.
With 86% of votes estimated to reported in Michigan, Trump holds a slim +0.6 lead.
Back to bullion, I reckon a weaker dollar from a Biden win would not necessarily lead to a major surge in gold. With Republicans looking likely to hold on to the Senate, it spells trouble for stimulus plans and the reflation trade narrative.
Even more so, if this ends up being a 270-268 outcome, the results will surely be contested and that may cast further uncertainty in the whole election saga.
I reckon that will also keep the greenback somewhat supported should it play out that way, considering the more negative risk flows.
For any major upside move in gold, buyers will have to try and contest last month's highs closer to $1,931-33. Otherwise, the gains here may be decent but they aren't leading anywhere despite managing to keep above $1,900 for now.
In the bigger picture though, any setback in gold is likely to be met with dip buyers as the larger narrative of currency debasement and more negative yielding debt piling up. That should ensure that gold will stay supported on any major retracement.