The gold market started this trading week off on the right foot, adding nearly $30 per ounce for the session. The buying was likely based on a slight increase in global risk aversion as well as some positivity on the daily chart.

The stress of the ongoing COVID-19 pandemic continues to wreak havoc on the healthcare system as more than 100,000 have now been hospitalized in the U.S. due to the virus. Although hopes for a vaccine have likely led to some buying in equities in recent weeks, the vaccine is not likely to be distributed on a widespread basis for some time yet. It could still be many months before the vaccine is made available to the general public. That fact, along with the upcoming holidays, could make for some very rocky times ahead. Some have suggested the worst of the pandemi8c is still yet to come, and with many people wanting and even planning to get together over the holidays, American hospitals could see a massive influx of cases in the weeks approaching.

In addition to the ongoing viral pandemic, markets are also worried over the possibility of additional U.S. sanctions against China. The U.S. is reportedly ready to slap sanctions on some Chinese officials in response to China’s crackdown on Hong Kong protestors. Any further sanctions could invite a response from China, and the global trade scenario could take a rapid and significant turn for the worse if the globe’s first and second-largest economies continue their war over trade. As if the global trade situation was not enough, investors are also becoming increasingly worried over Brexit, as chances of a no-deal Brexit appear to be on the rise.

On the other hand of all of this, U.S. lawmakers appear to be making solid progress on another stimulus plan that could total nearly $1 trillion. In another sign of economic positivity, the Chinese economy has continued to impress. The nation reported their largest rise in exports for several years and has apparently overcome the virus more rapidly than the U.S. The strong Chinese economy could potentially keep demand for gold bullion on the rise and may even keep the global economy out of recession if all remains equal.

The U.S. Dollar has also been a major catalyst for gold prices and the Dollar Index saw a bit of a bounce today. After hitting a 2.5-year low last week. Further dollar weakness could keep the gold and metals markets from moving much lower while maintaining a bullish bias over the long-term. Current U.S. monetary policy may keep the dollar on the defensive and the greenback could see a significant decline if long-term support on the chart fails.

Today’s outside-day up has leveled the playing field between market bulls and bears. If the bulls are able to maintain recent momentum, they could look to challenge the $1900 level. If the bears begin to take control again, however, the market could potentially sink towards the $1800 level. A breakdown below this area would inflict significant chart damage and could even lead to a reversal in the long-term trend.

This week could be a critical one for the gold market as numerous issues could come to a head. The yellow metal began the trading week losing gains seen in overnight action as a new vaccine for COVID-19 was reported to be nearly 95% effective. Traders and investors eagerly stepped in to buy the dip, however and drove the market back above the unchanged line. Both a weaker dollar and stronger crude oil prices also affected the yellow metal today, helping to keep prices from falling.

The new Moderna vaccine is said to be 94.5% effective and only requites standard refrigeration compared to the intense cold required by the latest vaccine produced by Pfizer. With some 11 million virus cases and hospitals that are quickly reaching or already at capacity, news of an effective vaccine could not arrive fast enough. Although it may take several months for the vaccine to become widely distributed, some investors are already looking towards life getting back to normal in the year ahead.

The vaccine news sent stocks sharply higher, and equity markets finished the day at their highs for the day. The strength seen in stocks recently could pave the way for more upside ahead, and alternative asset classes such as gold could see investors take a breather as they look to participate in equities and risk assets. Any pullback seen in gold is likely to remain shallow, however, as the overall effects of the viral pandemic have yet to be seen. Although the economy may stage a rapid recovery once the vaccine hits and the virus is stabilized, the negative effects of the pandemic could take months or longer to work their way through the global economy. Today’s Empire State manufacturing data are a prime example. The New York Fed reported that manufacturing declined sharply, from an October reading of 10.5 to a November reading of 6.3. The November reading was far below consensus estimates and countered increasing optimism over the global economy in the months ahead.

In addition to the viral pandemic, investors are also watching the President Trump campaign for any further activity on what it has called a botched election. Despite Trump still refusing to concede the election, he has seemingly acknowledged that Biden is the winner. That has not stopped Trump from preventing a smooth transition, however, as his campaign has yet to release the necessary funding for the Biden transition to take place. Without a smooth transition of power, more Americans could be affected by the COVID-19 virus.  Trump’s unwillingness to pass the torch smoothly could cost lives and may increase the pressure on the President to hand over power quietly and without hesitation.

The gold bulls scored a bullish outside day up on the daily chart after today’s action, but have significant work left to do to quiet the market bears. The bulls will look to close prices above the November highs around $1966, while the bears may look to drive prices lower to the November lows around $1850.

The markets are off to a strong start as the U.S. Presidential election rapidly approaches. It seems as if markets have perhaps already priced in a Democratic victory, and there may not be as much volatility as many had earlier predicted.

A Joe Biden Presidential victory could, however, dictate market action across a variety of asset classes in the months ahead. If Biden were to elect to close the economy, for example, stocks could have a tough road ahead and alternative asset classes such as gold could lead the way higher. The dollar could also possibly take another hit if Biden were to order further large-scale stimulus measures to battle the economic slowdown.

Of course, a Biden victory is nothing more than speculation at this point and Trump is still very much in the race. With some analysts suggesting that Biden is now holding a 10-point lead over Trump the day before the election, the biggest market risk could now lie in the election results and whether they are contested. A disagreement over the results could lead to widespread market volatility and selling. It could take weeks, possibly even months, to sift through a contested result to determine the winner. Recent market action would seem to suggest that markets do not necessarily fear a Democratic victory, but rather are more afraid of unclear election results after the vote.

It seems that Trump and the Republicans have already begun to lay the groundwork for legal action following Tuesday’s vote, and such action could take weeks or longer to be processed. If there is no clear winner within the next few days, investors could become increasingly agitated and could begin to sell out quickly. Although such a scenario could pave the way for higher gold and metals prices, it could also lead to a significant sell-off in the asset class as investors may simply become hungry for cash.

Despite the election and its outcome, the gold market appears to be well-positioned to begin another leg higher. Dollar weakness, an easing Fed and worries over the global economy may all keep the yellow metal supported in the weeks and months ahead.

Stocks may have entered a win/win situation. If Biden were to win the election, the markets could enjoy massive amounts of government spending and stimulus measures. If Trump is to win, markets may move higher on ongoing tax relief and a less regulatory business environment. If equity markets do continue their upwards trajectory, it begs the question of what could fuel a fresh rise in the gold market.

The bulls have control of the market on the daily charts, but that control appears to be fading a bit. The bullish camp must first take out the $1900 level on the upside and then must challenge the October highs near $1940 to maintain upside momentum. The bearish camp, on the other hand, will look to push prices lower and to challenge the September lows near $1850.

The gold market is moving higher today to kick off the new trading week as the dollar index comes under some pressure. A bullish technical posture as well as some safe haven buying ahead of the rapidly approaching presidential election two weeks away is also playing a role in Monday’s rise.

The same old factors affecting the yellow metal are still very much in play. Hopes for a U.S. stimulus plan are a bit higher today following Nancy Pelosi setting a Tuesday deadline for an agreement with the White House. The President has said that he is closer to the Democrats’ desire for a larger overall package than Congressional Republicans. The Senate is set to vote on the $500 billion plan on Wednesday and a positive vote could set the stage for a sharp rally in equity markets and risk assets.

Outside of the U.S. Presidential election, the general focus remains on the health of the global economy. China recently reported that its economy grew by 4.9 percent for the third quarter. That figure was below expectations, yet still suggests that the globe’s second largest economy is powering back sharply from economic closures seen just months ago. With new cases of COVID-19 seeing a sharp rise recently, any positive economic news may be considered bullish and may be reflected as such in markets.

China is also taking further steps to cement its place at the head of the global economic table. Recent reports suggested that China passed new legislation over the weekend that could help it keep a key economic advantage over the West. The Chinese Government can now reportedly restrict rare earth mineral exports to foreign nations and their companies. Advanced technologies, such as LEDs, are also impacted by the new legislation. The move by the Chinese Government could force more market players to set up shop in China and could put Western companies and nations at a disadvantage. These measures are the most recent escalation in the ongoing war over global trade and a response by the U.S. and/or other Western nations may be expected.

The U.S. is full of uncertainty with the election quickly approaching and with the battle against the pandemic ongoing. The E.U. is also a source of investor angst, however, as a “hard” Brexit may be becoming increasingly likely. U.K. Prime Minister Boris Johnson stated over the weekend that Britain should prepare for a “hard” Brexit of the European Union does not agree to a free trade agreement. The next couple weeks may be critical in the ongoing saga, as it will become increasingly clear whether the two sides are willing and able to meet each other halfway in order to avoid further economic damage. The unknowns surrounding Brexit may keep the yellow metal well supported in the weeks ahead and could even lead to sharp gains for the metal.

All else being equal, a weaker dollar, weaker economy and uncertainty over the election and Brexit may keep the gold bulls on the offensive in the weeks ahead.

The gold market is holding above the $1900 level despite sharply higher stocks. Hope for another round of stimulus spending out of Washington D.C. has investors buying stocks and risk assets even as President Donald Trump remains hospitalized with the COVID-19 virus. Optimism over Trump’s health is also playing a role on Monday following the President’s recent motorcade appearance yesterday.

The recent downside seen in the gold market may be nothing more than a healthy market correction, and that correction may have now run its course. The previously overbought condition has now shifted to an oversold condition, and that oversold condition may lead to buying interest this week that could stabilize the market and further encourage the bullish camp.

The markets certainly have no shortage of factors that could affect price action. As the global economy continues to monitor the spread of the CIVID-19 pandemic, many investors are now likely watching President Donald Trump very closely after he said he tested positive for the virus late last week. Although recent appearances from the President have been encouraging to his followers, his actual health situation remains unclear and the virus is known to cause significant and rapid changes in those who contract it. A serious downturn in Trump’s condition, for example, could fuel a massive flight to safety and sell-off in stocks and risk assets. A rapid recovery, on the other hand, could be viewed as encouraging and could fuel fresh all-time highs in equities in the weeks ahead.

The rapidly approaching U.S. Presidential election will also likely play an increasing role in the metals markets and other global financial markets. The democratic margin of victory has reportedly spread in recent days, and a Biden win could set the stage for a significant shift in investor thinking and market action. A Trump victory, however, could potentially see stocks continue higher while the dollar index weakens further.

The gold market may now turn its attention to the upcoming election as well as any central bank activity. Despite the widening lead for Democratic candidate Joe Biden, markets may see increasing volatility as the election approaches. Trump has seemingly already begun to set the stage for an election outcome disagreement, although the wider Biden’s lead becomes the less likely Trump may have any ground to stand on following the vote. Although a decisive election result may calm some nerves, others may become increasingly anxious over the notion of a Biden victory and what that could mean for markets and the economy. Given current thoughts of increased taxes and tighter regulations, many investors could choose to head for the exits and markets could see a significant downward slope post-election.

Regardless of who wins the November 3rd election, the stage may be set for higher gold prices. The combination of a weaker economy, declining dollar, central bank easing and other factors may be too much for the bears to handle. The value of gold is quite likely to increase in the months and years ahead, as shifting economic and market dynamics fuel the desire for perceived safe haven asset classes.