By David Brough
Gold rose sharply in the first week of November as Joe Biden edged closer to the White House, underpinned by prospects for a big economic stimulus package to relieve the impact of coronavirus on millions of Americans.
Gold rallied by over 3 percent to $1,949.61 per ounce in the week to November 7, supported by uncertainty over the U.S. election result and by a weak dollar, at a two-month low, with growing expectations that a major economic stimulus package would materialise in the world’s biggest economy as infections continued to soar. Gold is up 28 percent this year.
The prospect of legal challenges to be launched by President Trump could mean further political uncertainty in the coming weeks, potentially supporting bullion which can benefit as a safe haven during periods of turmoil.
“Although it is increasingly looking as if Joe Biden could win the Presidency, assuming the Trump challenges are not upheld, there remains a major degree of uncertainty over the eventual outcome which could take weeks, if not months, to be settled,” wrote Lawrie Williams, gold market commentator with bullion dealer Sharps Pixley.
“One suspects the gold price will continue to be volatile with the ebb and flow of the challenges, but overall we see this uncertainty as a positive for precious metals.
“Our prediction that $2,000 gold could be reached again before the year-end certainly remains a possibility.”
Disclaimer: Any opinions expressed in this column are solely those of the author and should not be considered as investment advice.