Gold edges lower, U.S congressional elections loom

Gold has posted slight losses in the Monday session. In North American trade, the spot price for one ounce of gold is $1230.41, down 0.09% on the day. On the release front, ISM Non-Manufacturing PMI posted a strong gain of 60.3, above the estimate of 59.3 points. On Tuesday, the U.S will release JOLTS Job Openings and all eyes will be on the U.S midterm congressional elections.

It could be a busy week for gold, with two key events. On Tuesday, U.S voters go to the polls in congressional elections, with control of the Senate and the House to close to call. Analysts expect the Republicans to cede the House but maintain control over the Senate. This would weaken President Trump and could hurt his ability to pass further trade and tax reforms. On Thursday, the Federal Reserve winds up its monthly policy meeting. The Fed is expected to maintain interest rate levels, and the markets will be closely dissecting the rate statement. A hawkish stance from policymakers could weigh on gold prices.

More job numbers, more good news about the U.S labor market. The economy continues to perform well, a fact that will be hammered home by President Trump and the Republicans in the few hours left until Election Day on Tuesday. The labor market is at or beyond capacity, and nonfarm payrolls surged to 250 thousand, crushing the estimate of 194 thousand. Wage growth has also strengthened, with strong gains of 3.1% in the past year. Despite these strong numbers, the dollar failed to make headway on Friday, as reports that President Trump will present his Chinese counterpart with a trade deal proposal increased risk appetite and weighed on the greenback.

XAU/USD Fundamentals

Monday (November 5)

• 9:45 US Final Services PMI. Estimate 54.7. Actual 54.8
• 10:00 US ISM Non-Manufacturing PMI. Estimate 59.3. Actual 60.3
• Tentative – US Loan Officer Survey

Tuesday (November 6)

• 10:00 US JOLTS Job Openings
• All Day  – US Congressional Elections

*All release times are EST

*Key events are in bold

XAU/USD for Monday, November 5, 2018

XAU/USD November 5 at 11:25 DST

Open: 1233.05 High: 1235.17 Low: 1226.92 Close: 1230.41

XAU/USD Technical

XAU/USD ticked higher but then retracted in the Asian session. The pair posted considerable losses in European trade but has recovered some of these losses in the North American session

• 1220 is providing support
• 1236 is the next resistance line
• Current range: 1220 to 1236

Further levels in both directions:

• Below: 1220, 1204, 1170 and 1146
• Above: 1236, 1261 and 1284

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