Gold Slides while Oil Recovers as US Vote Count Continues

Gold held losses as oil gained slightly in commodities on Thursday. Tight races in key battleground states in the United States election left investors groping for certainty concerning the U.S. presidency.

In precious metals, copper and gold responded to the roller coaster movement of the dollar. The bullion was swinging between a gain of about 0.4% and a loss of 1.4%.

The yellow metal traded between USD1880.00 and USD1920.00 an ounce overnight. But as things quieted down, it still finished down 0.35% at USD1903.00 an ounce.

It did recapture the 100-DMA at USD1896.00 an ounce. However, it again failed to break the apex of the triangle formation at USD1913.60 an ounce.

In energy commodities, oil gained as much as 4.2% to reach over $39 per barrel. It fluctuated in an almost $2-a-barrel range during most of the day’s trading session.

Commodity-market is anticipated to experience massive volatility. Delays to a conclusive outcome are likely in the coming days. The markets are expected to remain jittery as investors wait for more clarity. 

Historically, in a United States presidential election, the stakes have never been this high. Whoever wins the presidential seat will have an uphill battle in leading the country’s fight against COVID-19. The pandemic has already claimed over 230,000 lives in the country and battered its economy.

On the Oil Market

The next president is expected to play a major role in shaping domestic and international efforts on a global scale. These are efforts against the use of fossil fuels, concerning climate change, and on the speed of energy transition.

Crude futures extended their gains. The US government report indicated that domestic supplies lost by 8 million barrels in the past week. Distillate inventories also declined. 

However, from 2019, a gauge of gasoline demand was down by 11%. 

The chief commodities analyst at SEB AB, Bjarne Schieldrop believes that a Trump win will be bullish for oil.

That’s because OPEC+ can continue cutting without any fears that Iranian oil supply will get reintroduced into the market soon.

On Other Commodity Markets

In the copper market, investors are looking for significant clues on the possible path of U.S.-China trade relations. That will be throughout the next presidential term. 

Moreover, soybean futures posted their best day in a month. This was amid signs that strong Chinese buying may last into 2021 and fears of dryness in critical South American producers.