Gold

Gold prices have started the week on a firmer footing with the safe haven seeing steady buying across the European morning. The moves have largely been in response to the weakness in the US Dollar which has found itself under offer once again, translating into higher commodities prices.

Uncertainty around the US election is beginning to lift somewhat with Trump broadly seen to acknowledge defeat over the weekend. While Trump has yet to officially concede and vacate the White House, during an interview and on Twitter he was seen grappling with the issue, talking about the next administration.

Away from the elections, traders are waiting on further updates following last week’s vaccine news. While risk assets responded favourably initially, these moves have died down a little now in the absence of any further details. With global COVID cases and the global death toll still rising, there is still a great deal of uncertainty regarding the path of the pandemic and without any further positive news, there is room for further giveback, which should support gold further through safe haven inflows.

Silver

The silver market has seen similar moves to gold with firmer prices at the start of this week. Along with the positive impact of a weaker Dollar and higher gold prices, silver has also been helped by the rally in equities markets. Equities shot higher last week in response to the vaccine news and, despite some retracement, have started the week positively, suggesting further bullishness for silver in the near term. The potential for a return to normal next year is a big boost to the industrial demand outlook for silver.

Technical Views

GOLD

Despite the heavy sell off last week, gold prices remain underpinned by the 1858.28 level. support for now. While this support holds, there is room for a continuation higher for gold. A break below that level, however, would turn attention to the 1803.51 level and a retest of the broken bearish channel.

SILVER

Silver prices are once again testing the 25.0756 level resistance with the bear channel top sitting just above. This is a key level for silver and a break higher here would open the way for a move up towards the 27.3955 level next. To the downside, the key level to watch remains the 22.6242 level which has underpinned silver since July, a break of which would turn attention to the bear channel low and the 19.6076 level next.

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