Financial markets react to the upcoming presidential election results | The Gold Forecast

Financial markets react to the upcoming presidential election results

November 3, 2020 - 6:22pm

 by Gary Wagner

This will truly be a historical week with two major events occurring. First and foremost is the presidential election which took place today. Although a winner will not be announced till much later in the evening, the excitement from both sides of the aisle with each candidate conveying an optimistic outlook with the belief that either candidate could become the next president of the United States. If President Trump the incumbent is successful, he will remain as the 45th president of the United States. If his opponent Joe Biden is elected, he would become the 46th president of the United States.

On November 5th, Federal Reserve members will meet for this month’s FOMC (Federal Open Market Committee) meeting. Federal Reserve Chairman Jerome Powell will conclude the meeting as he always does with a statement and then a series of questions from the press will be answered.

According to many analysts, the expectations that there will be new policy actions of significance are very low. We can expect the former guidance conveyed for future policy to remain largely unchanged. What might be interesting is the fact that this meeting is being held within days of a presidential election and Fed members will have to incorporate either a new president or the incumbent winning a second term.

With the release of the Federal Reserve’s “dot plot” in September it seems highly probable that they will follow the guidance and timeline that they laid out. It is highly unlikely with the current economic contraction and the pandemic swelling to alarming heights that they will even discuss the possibility of an interest rate hike. If they follow the guidance, they laid out in September there will be no interest rate hikes for the remainder of the year, as well as 2021.

So, what becomes exceedingly important is the passage of a fiscal stimulus bill. Currently, the House of Representatives via Nancy Pelosi has dug in deep and has not compromised on her key demands that the aid package sends relief capital to many states that need it. However, that could dramatically change if Joe Biden wins the presidential election. It is the optimism that a fiscal stimulus aid package will be forthcoming that has driven both U.S. equities (risk-on assets) and gold (safe-haven asset) to higher pricing.

As of 4:33 PM, EST December gold futures gained $17.20 (+0.90%) and is currently fixed at $1909.70. Gold futures traded to a high today of $1912 before slightly backing off of that intraday high. Both gold and silver had net gains today that were approximately 9/10 of a percent. December silver futures gained $0.22 (+0.97%). The Ishares Silver Trust (SLV) is currently fixed at $22.44, and the SPDR gold trust shares are currently fixed at $178.92, gaining just over a dollar per share in trading today.

As the election results unfold and the winner and next president of the United States are announced we could expect to see some knee-jerk reactions and increase volatility. But as far as the winner goes it’s not over till the two old men sing.

Wishing you as always, good trading and good health,

Gary S. Wagner - Executive Producer

This report is now free and publicly available to everyone

Gold Forecast: Proper Action

On November 2 we sent out a trade alert to buy gold and silver

Open Trades as of November 2<

Buy December gold at the market - $1899. With stop @ $1861

Buy forex gold at the market- $1896.00. With stop @ $1860

Buy December silver at the market - $24.21. With stop @ $18.81

Open Trades as of October 21

Maintain GLD at $180.46and stop at $173.50

Maintain SLV at $23.23 and stop at $20.33


Long December Gold Futures at $1926 and stop hit at $1907.30 for a loss of $19.70 per ounce
Long Forex Gold at $1922 and stop hit at $1903 for a loss of $19.00 per ounce
Long December Silver Futures at $25.13 and stop hit at $24.73 for a loss of $0.40 per ounce
Long December gold at $1890, out at $1909.30 for a profit of $1,930.00
Long December silver at $23.95, out at $24.50 for a profit of $2,750.00
Long Forex gold at $1883.68, out $1907 for a profit of $23.32 per ounce
Long GLD ETF at $178.03, out at $179.80 for a profit of $1.77 per share
Long SLV ETF at $22.66, out at $22.03 for a loss of $0.63 per share
Long December Silver (SI Z20) @ $27.07 - Stop hit @ 25.56 for a loss of $1.51 per ounce
Long GLD @ $183.91- stop hit @ $178.50 for a loss of $5.41 per share
Long SLV @ $ 26.33 - stop hit @ $23.53  for a loss of $2.80 per share
Long December gold (GC Z20) @ $1947.00 - Stop hit @ $1952 for a profit of $500.00 per contract
Long Forex gold (XAU A0-FX) @  $1939.00 - Stop hit @ $1944.80 for a profit of $5.80 per ounce
Long December gold @ $1956.50.Stop hit @ $1960 for a profit of $350.00 per contract
Long December silver @ $27.39.Stop hit @ $27.80 for a profit of $2050 per contract
Long forex gold @ $1948.55.Stop hit @ $1955 for a profit of $6.45 per ounce
Long GLD @ $183.57.Stop hit @ $184.36 for a profit of .79 per share
Long SLV @ $25.10.Stop hit @ $25.75 for a profit of .65 per share
Long September silver at $26.68. Our stop was hit @ $26.87 for a profit of $1000 per contract.
Long December Gold at $1955.50. Our stop was hit @ $1979 for a profit of $2350 per contract
Long Forex Gold at $1947. Our stop was hit @ $1967,52 for a profit of $20.52 per Ounce
Long September silver at $24.40. Our stop was hit @ $25.99 for a profit of $7950 per contract
Bought GLD @ $166.74. Our stop was hit @ $$183.00 for a profit of $16.87 per share.
Bought SLV @ $18.00 Our stop was hit @ $23.80 for a profit of $5.80 per share.
NUGT – we sold all shares and took profits of $33.19 per share
Long December gold at $1997, we covered the trade @ $2035 for a profit of $3800 per contract
Long Forex gold at $1977, we covered the trade @ $2017 for a profit of $40.00 per ounce

Gold Market Forecast

The beauty of living in a democratic society is that every couple of years we the people are able to vote and elect a representative we think will service best. Such is the case today, November 3 when the presidential elections were held in the United States. As we are completing this members page votes are being tallied but there is no clear winner as of yet.

Depending on the outcome of the election we will see the reaction fold into the financial markets throughout the early evening. Since we have positioned ourselves in gold and silver, along with the electronically traded funds GLD and as of the I believe we are properly positioned to take advantage of the upcoming announcement when a victor is revealed. Regardless who wins our best hope is that we have an orderly transition.

Market Overview

Economic Calendar