Gold climbs back up to $1,918, its highest level since 22 October
As mentioned yesterday, gold is very much trading as part of the anti-dollar trade when it comes to the election narrative at the moment.
Although the bond market continues to digest the stimulus story, gold is instead following the rest of the market in getting caught in between the push higher in equities and the slump in bond yields.
My take on this is that gold wants to badly follow the reflation trade story.
However, amid the likelihood that we may end up with a Biden presidency and a Republican Senate, that is put on hold or at least will take a longer time to play out and so gold has to focus on the dollar story instead.
The dollar is sitting weaker on the day and that is leading to gold now pushing to $1,918 and trading to a two-week high. That said, the October highs closer to $1,931-33 will be a key resistance region to watch moving forward.
Unless buyers break above that, I'm still less convinced of a major breakout in gold just going by the election narrative alone. The dollar may be weak but there are still lingering question marks for the time being when it comes to the greenback.
As for any pullback in gold, look towards the 100-day MA (red line) closer to $1,897 for support before we get to the late October lows @ $1,860-65.
