Gold

The gold market has been firmly higher over recent days in response to the strong sell off in USD as a result of the US presidential elections. Over the second half of last week it became clear that Democrat president Joe Biden was likely to win the elections, taking a strong lead in the electoral college vote register which meant that, as of the New York close on Friday, at 264 votes to Trump’s 214, Biden was assumed to have won and markets were just waiting on an official announcement.

Over the weekend, major television networks announced that Biden had won the elections with the vote count rising as high as 290 – 214 in favour of Biden. With the results coming in, the Dollar has been heavily sold ass investors seek safety elsewhere amidst a changing US political and economic environment. Gold prices have benefitted greatly from this dynamic with gold rising back up to their highest level since mid-September.

Despite the votes being overwhelmingly in Biden’s favour, Trump has so far refused to accept defeat and has said that he will not yet leave the White House. With three states still reporting, Trump has launched a series of bizarre attacks on the voting process, including accusation of frauds and calls for recounts, which have added to the selloff in the US Dollar here.

Silver

Silver prices have tracked the moves in gold and have seen a firm rally over recent days, benefitting from the continued weakness in the Dollar. With USD likely to remain under pressure over coming days as the remaining states report their results, silver prices have more room to appreciate in the near term. The rally in equities prices is also helping silver prices. With markets beginning to look ahead to the prospect of a larger stimulus package under a Democrat administration, the near-term view remains supportive here.

Technical Views

GOLD

From a technical viewpoint. Following the earlier breakout above the bear channel, gold prices have subsequently retested the channel, which held as support and have now broken above the 1926.63 level. While above here, the outlook remains firmly bullish with bulls looking for a break above the 1979.25 level next to encourage more momentum.

SILVER

From a technical viewpoint. The rally in silver has seen price trading back up off the bear channel low and finally breaking back above the 25.0756 level. Price is currently challenging the bear channel top, a break of which will be a firm bullish signal, putting attention on the 27.3955 level next.

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