Gold

The gold market continues to trade within the 1850 – 1919 range which has captured price action over much of the last two months. Gold has been under pressure over the last week as a result of the resurgent strength in the US Dollar which has seen better buying A narrowing of the margin between Trump and Biden in US election polls has driven fresh buying in USD as investors view the outcome of the election as less of a certainty following the reversal of sentiment in some key swing states in favour of Trump.

Along with the strength in USD as a result of the elections impact, USD has also seen safe haven buying amidst the increasing concerns around the growing second wave of COVID-19. The virus has been spreading at an accelerated rate around much of the world, leading to fresh lockdowns in Europe. While the US has yet to re-impose a nationwide lockdown, some states have returned to local lockdowns which is a theme likely to continue over the coming months as the US heads through winter.

The FOMC will be the main focus for markets this week with investors looking to gauge whether the Fed is likely to ease again this year. While no adjustments are expected at this meeting, the market will be looking for clues as to the likelihood of a December adjustment as well as how the Fed views risks around the US elections.

Silver

Silver prices have seen better demand at the start of this week. Though still down off the October highs, having once again failed at the 25.0756 level, silver prices are putting in a second consecutive day in the green so far. The US elections and the November FOMC meeting this week both pose risks of plenty of volatility which should provide the catalyst for a clearer directional move in the markets. If Trump wins, USD is likely to continue higher which should create a deeper drag on silver prices in the near term.

Technical Views

GOLD

From a technical viewpoint. Gold has once again found support at the 1858.28 level, which also coincided with the retest of the broken bearish channel. While above here the near-term view remains bullish with the 1926.63 level the next key resistance zone to note. To the downside, any break of the 1858.28 level will turn attention to the 1824.56 level next.

SILVER

From a technical viewpoint. Silver prices have held a further test of the 22.5950 level support but remain within the bearish channel which has framed the correction from 29.8611, keeping the medium-term view tilted to the downside.

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