Investing.com – The Trump presidency’s potential challenges after the U.S. midterm election is keeping supported at the key $1,200 level, though there isn’t a rush of hedgers into the yellow metal yet, as was speculated.
Comex gold for December delivery traded in a band of nearly $13 in Wednesday’s session, moving from a session low of $1,224.50 to a high of $1,237.40 a troy ounce before settling up $2.40 at $1,228.70.
“Currently, it is difficult to find a catalyst that would propel the spot price of gold to the next major level of resistance at the $1,239- $1,240 area” notwithstanding further clarity on U.S. political direction, said Walter Pehowich, executive vice president at Dillon Gage Metals in Addison, Texas.
In Tuesday’s election, President Donald Trump’s Republican party strengthened its grip on the U.S. Senate, but lost the House to Democrats, putting limits on the president’s legislative ambitions. Analysts say the split result was likely to result in a raft of new Democratic probes that could distract and occupy the White House as Trump fights for a second term.
Financial markets took the election result in their stride. The , a measure of the greenback’s strength against six major currencies and a contrarian bet to gold, dipped almost 0.25%. But Wall Street’s index surged as investors piled into growth sectors such as technology and health care on relief that the elections had produced a gridlock, but not enough to affect growth policies.
Activity in gold was also subdued ahead of the release of the monthly Federal Reserve policy statement, due on Thursday after the central bank’s meeting. While the Fed is not expected to raise rates until its December meeting, this month’s policy statement will still give markets a read into how the central bank perceives the economy, inflation and labor market, which are key to higher rates.
Since August, gold has managed to stay above the $1,200 level that’s critically-important for the psyche of market bulls, despite constant hawkish talk by the Fed, which has already raised three times this year.
The protracted US-China trade war has been a pillar of support for gold.
In other precious metals trading on Wednesday, COMEX rose 0.9% to $14.73 a troy ounce by 3:00 PM ET (20:00 GMT).
jumped 2.3% to $1,120.90 an ounce, while sister metal traded up 0.8% to $878.80.
Among base metals, COMEX climbed 0.6% to $2.75 a pound.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.