Gold surge pushes on as markets continue to factor in US election risk premium as we inch closer to election day. In the de-centralised betting markets (poly market as a reference), Trump-over-Harris spread continued to widen sharply in favour of Trump. And that brings back worries of tariffs, inflation and fiscal concerns. XAU was last at 2783 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Moving towards the $2800 resistance

“Trump’s proposed tax cut would add $7.5tn more to US debt (according to estimates from nonpartisan nonprofit committee for responsible federal budget). The potential ballooning in US debt also stirred up the narrative of dedollarisation, adding to demand for gold. Defensive positioning/ trump hedges (i.e. long USD, long gold, short CNH) may still gather traction in the near term given the fluidity of election developments and geopolitical uncertainties.”

“US election results should be known on the night of the election (6 Nov SGT). Outcome is a big unknown, judging from polls which is too close to call. There will be implications on prices of asset classes including gold, FX, etc as shifts in fiscal, foreign and trade policies may occur, depending on whether Trump or Harris is elected as the next President.”

A Trump outcome may see a play-up of USChina trade tensions and should inject some uncertainty to markets and continue to fuel demand for gold. While a Kamala Harris outcome should see some of these volatility and uncertainty ease. On this outcome, we may possibly see gold prices find a breather after a near 35% rally this year. Momentum is bullish while RSI is near overbought conditions. Next resistance at $2800. Support at $2720, $2690 (21 DMA).”