U.S. Dollar Continues to Weaken, Biden Election Possibility Increases

  • The continued weakening of the U.S. dollar exchange rate and the increased possibility of Biden's victory in the US presidential election boosted hopes for the rescue bill.
  • New York gold rose 0.3% and reached at 1,951.70 US dollars, the highest since Sept
  • Commodity experts say that the rapid spread of COVID-19 on a global scale has also provided support for gold and its sister metal silver.

The price of gold futures for December delivery on the New York Mercantile Exchange rose 4.90 US dollars and closed at 1,951.70 US dollars per ounce, the highest closing price since September 18. This week, gold futures prices have risen by 3.8%, the biggest weekly increase since July 31.

Silver metal bars.

The US dollar exchange rate continued to weaken, and the possibility of Biden’s victory in the US presidential election increased to boost hopes for the rescue bill. Gold closed slightly higher, setting its highest in more than seven weeks.

Silver futures prices for December delivery rose 47.1 cents, and close at $25.662 per ounce. Silver futures prices rose 5.4% yesterday. Silver futures prices have risen by 8.5% this week, the biggest weekly increase since August 7.

Commodity experts say that the rapid spread of COVID-19 on a global scale has also provided support for gold and its sister metal silver.

The employment report also showed that the U.S. economy added 638,000 jobs in October, which was higher than the expected 503,000, but this was a little bit compared with the rate at which the labor market began to recover after the COVID-19 outbreak in May. Slowing down, the unemployment rate fell from 7.9% to 6.9%.

“We’re still left with the view that the US economy is decelerating, and that’s playing out in a markedly weaker dollar,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

“The longer the vote counting goes, the more nervous the market could get and that could actually result in safe-haven flows for the greenback,”  Manimbo said.

Kitco.com senior analyst Jim Wyckoff said that the metal market rose this week, partly because the dollar index fell and hit a nine-week low overnight.

At the same time, due to the uncertain weekend, the gold and silver markets also showed safe-haven demand on Friday morning. According to data from FactSet, the Intercontinental Exchange’s dollar index hit its biggest weekly decline since March 27, down 1.9%.

US Dollars currency

A weaker U.S. dollar helps boost the attractiveness of dollar-denominated assets such as gold and silver.

HSBC’s chief precious metals analyst Jim Steel wrote in a report: “As the market effectively forms a new perspective on risk, the price of gold and other precious metals has soared.” He said: “There is a clear shift to the adventurous tone, thinking that Joe Biden is more likely to become the next president, and the impasse in the US Congress has affected market sentiment.”

According to data from Johns-Hopkins University, as of Friday, the number of confirmed coronavirus infections worldwide has reached 48.8 million, and the total number of deaths has exceeded 1.2 million.

The United States has more than 9.6 million infections and 234,944 deaths-about one-fifth of global deaths. The number of infections and deaths is the highest in the world.

The Federal Reserve held a policy rate on Thursday and stabilized the monetary policy rate between 0% and 0.25%. But the central bank is willing to provide more currency to support business activities caused by the spread of the virus in the US economy.

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Joyce Davis

My history goes back to 2002 and I  worked as a reporter, interviewer, news editor, copy editor, managing editor, newsletter founder, almanac profiler, and news radio broadcaster.

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