"Despite the polls, gold price action and positioning do not seem to fully reflect a Biden victory. A Biden victory and full control of Congress presents the most upside risk for gold prices. Still, beyond the election, the macro backdrop remains supportive of further gains for gold," Standard Chartered precious metals analyst Suki Cooper said this week.
Cooper sees gold rising back up to $2000 an ounce during the fourth quarter of this year and then climbing to $2100 during the first quarter of next year, writes Anna Golubova for Kitco News.
Gold has been closely tied to the US dollar moves this year and that is likely to continue. This is why Cooper highlights Biden's victory as the one most beneficial to gold.
"The US dollar remains the primary driver for gold at the moment and in the past six elections, the gold-USD correlation was not only firmly negative five weeks ahead of the presidential election, but also remained so at the time of the election; in half of the instances, the relationship strengthened," Cooper said.
"A Biden victory and Democrats gaining full control of Congress paints the weakest scenario for the US dollar, UST yields and US Treasury risk assets in light of intended fiscal stimulus and tax increases; and given that gold currently has the strongest correlation (over - 50%) with the USD, the USD response is key."