Gold may be waiting on U.S. midterms
Gold may be waiting on U.S. midterms by Lawrie Williams
An article published by me a few days ago on the info.sharpspixley.com website – and followed by on on the same subject from a U.S. commentator:
The gold price, after its recent uptick, seems to be consolidating in a US$1,220-$1,230 range, perhaps held in check by a stronger U.S. dollar index – although maybe even more likely by machinations on the COMEX paper gold futures market. Every time upwards pressure moves the price to the $1,230 mark it appears to be smartly brought back down a few pegs! Movements in and out of the big SPDR Gold Shares (GLD) gold ETF have been non-existent the past few days, suggesting too that the institutional market may be biding its time, waiting for a break-out one way or the other before committing more funds, or withdrawing gold, out of the world’s biggest gold ETF.
With the U.S. midterm elections coming up in a few weeks’ time and with some uncertainty showing up in the polls, gold may well find itself in a hiatus period until after election date (November 6th). There’s an interesting article published by the BBC in the UK which looks in some graphical detail at the various factors which have tended to move the electorate under past Presidencies and the latest corresponding figures (See: US mid-terms: Can we tell if Democrats will win?) Looking at the figures and charts, currently they would on average suggest good Democratic party gains, although whether enough to gain a majority in the House of Representatives, which the Republicans currently control by 241 seats to 194, let alone in the Senate, is not so certain. President Donald Trump (who is a hugely contentious figure in U.S. politics) has confounded the polls before and could well do so again. His supporters are fanatical in their partisanship – but then so are his opponents .
We think that perhaps the best pointer to the eventual result may lie in the numbers of political retirements ahead of the midterms from each party – and far more Republicans are retiring than Democrats. The Democrats have also been far more successful in raising funds for advertising campaigns supporting their candidates than the Republicans.
As the BBC article notes on the political retirements: “Several key committee chairs and Speaker of the House Paul Ryan have already joined what’s become a modern record for retirements from a majority party – a telling sign that they think Republicans may not be a majority much longer. Several incumbents – on the left and right – also were forcibly retired, as they lost primary races to grass-roots challengers. That could be another indication of an anti-incumbent mood in the electorate that, because there are more Republicans running for re-election than Democrats, could help fuel a Washington power shift.”