December Gold: Open= 626.0 High= 629.9Low=624.5 Close= 627.9 Change: -1.3
Gold futures traded a relatively quiet day preceding US elections on Tuesday.December prices failed to break $630 and saw two sided trading throughout the session.Prices are likely to stay mixed to weak until results are better known or another story develops in the interim.A price correction is not out of the question at this time and unfavorable election results could provide an impetus to take profits.
By historically standards, this election should wing towards the Democrats.Non-presidential elections tend to favor the party out of power.Using averages, Republicans should lose 25 seats in the House and 6 in the Senate.Modern gerrymandering, thanks to powerful computers, has made the incumbent advantage so great that a shift of that magnitude should be unlikely.Certainly, it is possible and would not be ‘historic’ at all, but actually normal.
A dramatic win by Democrats could be bullish for gold as the current party leadership exudes isolationism and protectionism.Foreign buyers of the dollar may balk at this shift in power, sinking the dollar, thus raising the prospects of rising gold prices. A victory by Republicans only holds the status quo and may influence direction little.The Republicans have a more friendly tone towards foreign investors but have done little to spark enthusiasm of owning the dollar.
Current conditions may warrant a retest of support at $620 and even as low as $610.If prices rally and sustain prices above $630, prices could sprint to $650 before a correction comes.
Support comes in at $625, $620, $611. Resistance is seen at $630, $640, and $650.
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