Commodity Market: Gold steadies after steepest loss in two weeks as virus spread, US election uncertainty support haven demand

After its steepest single-day slump since October 13th on Wednesday, Spot Gold was mostly steady during European trade on Thursday as recent US Dollar rally paused, while accelerating virus spread globally and uncertainty surrounding the US presidential election next week were factors supporting safe haven demand for the precious metal.

Recent polls show that Democrat Joe Biden has a lead over Donald Trump nationally, with competition being tighter in swing states.

Additionally, according to Vandana Bharti, assistant vice president of commodity research at SMC Comtrade, “in giant economies like France and Germany, COVID-19 cases are increasing and again they are going for lockdowns. So in that situation, there should be some safe-haven buying for gold.”

As of 10:35 GMT on Thursday Spot Gold was inching up 0.02% to trade at $1,877.56 per troy ounce, while moving within a daily range of $1,875.50-$1,885.05 per troy ounce. Yesterday it fell to $1,869.46, or its weakest level since September 28th ($1,848.80). The yellow metal has retreated 0.40% so far in October, following a 4.17% slump in September, its worst performance since November 2016.

Meanwhile, Gold futures for delivery in December were retreating 0.06% on the day to trade at $1,878.00 per troy ounce, while Silver futures for delivery in December were down 0.50% to trade at $23.242 per troy ounce.

“The broad supportive band (for gold) through $1,870-$1,880 remains intact for the time-being… Key near-term drivers remain US equity flows and dollar direction,” MKS PAMP said in an investor note.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching up 0.04% to 93.47 on Thursday, while remaining not far from yesterday’s 1 1/2-week high of 93.65.

On today’s economic calendar, Gold traders will be paying attention to the preliminary US GDP report for Q3 as well as to the weekly jobless claims data due out at 12:30 GMT.

The outcome from the European Central Bank’s policy meeting at 12:45 GMT will be also in focus.

Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of October 29th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on November 4th-5th, or unchanged compared to October 28th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,885.84
R1 – $1,902.23
R2 – $1,927.21
R3 – $1,943.59
R4 – $1,959.98

S1 – $1,860.86
S2 – $1,844.48
S3 – $1,819.50
S4 – $1,794.51

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