By David Brough
The outlook for gold prices, currently hovering close to $1,900 per ounce and well below their early August peak in excess of $2,060, will depend on the timing and impact of a possible new U.S. economic stimulus package.
It is still unclear whether a package to ease the plight of millions of Americans during the coronavirus pandemic, will be approved before the November 3 U.S. presidential election.
A much-awaited stimulus would have the potential to raise gold prices and weaken the dollar. If a deal cannot be agreed, gold prices could fall and the dollar could rise in a flight to safety.
Whoever wins the election, is likely to drive forward stimulus measures to help kickstart the economy after the devastation to millions of jobs due to COVID-19.
Gold settled on Friday October 23 slightly above $1,900 per ounce after trading in a fairly flat range during the period of the election campaign, possibly in some part due to uncertainty over the outcome despite Democrat candidate Joe Biden’s lead in the opinion polls.
“Sentiment may shift a little depending on the various opinion polls which may, or may not, predict one of the major presidential election candidates winning the contest,” wrote Lawrie Williams, gold market commentator for bullion dealer Sharps Pixley.
“But on recent performance, and past history, gold will most likely maintain the current status quo.”
Disclaimer: Any opinions expressed in this article are solely those of the author and should not be considered as investment advice.
