TEHRAN (Iran News) – weekly Forecast, Bullish gold investors received a couple of gifts last week – Democrat Joe Biden was elected president of the United States and the U.S. Federal Reserve reiterated their support for the economy. The gift wasn’t perfect, however, as the Democrats lost a few House votes and it looks as if the Republicans will retain control of the Senate.

Last week. December Comex gold futures settled at $1951.70, up $71.80 or +3.82%.

Biden crossed the threshold of the 270 Electoral College votes required for victory on Saturday by winning the battleground state of Pennsylvania. Republicans appear to have retained control of the Senate, though the final makeup may not be clear until runoff votes in Georgia in January.

Essentially, it was the weaker U.S. Dollar that drove dollar-denominated gold higher. “Price of Gold Fundamental Weekly Forecast – More Accommodative Fed Key to Next Price Surge”

Lower Dollar, Higher Gold

A Democratic president and House, and a Republican Senate is ideal for the gold market. Since neither party controls the Congress, both trade wars and higher taxes are largely off the table. Furthermore, the prospect of more gridlock also means that expectations for a massive U.S. fiscal stimulus package have been lowered.

Removing massive coronavirus stimulus from the agenda sent bond yields sharply lower in anticipation of less borrowing and more quantitative easing from the U.S. Federal Reserve.

The plunge in long-term U.S. Treasury Bond yields made the dollar a less-attractive investment, driving up demand for gold.

“Price of Gold Fundamental Weekly Forecast – More Accommodative Fed Key to Next Price Surge”

Fed Keeps Policy Steady

The Federal Reserve kept its loose monetary policy intact on Thursday and pledged again to do whatever it can in coming months to sustain a U.S. economic recovery losing speed amid a spreading coronavirus pandemic.

The economy is still growing but “I would not say that anybody is feeling comfortable about this,” Fed Chair Jerome Powell said in a news conference after the Fed’s latest two-day policy meeting. “We’ve gotten through the first five, six months of expansion better than expected…But we have to be humble where we are relative to this disease. It has not gone away.”

Weekly Forecast

We’re looking for higher gold prices over the near-term although we do realize that speculators may have jumped the gun on the bullish news last week. The short-term outlook is clouded by doubts where fiscal policy may be headed in coming weeks, or how smooth the transition between an incoming Democratic administration led by Joe Biden and lame-duck administration led by Republican President Donald Trump will be.

We are certain that a combination of fiscal stimulus, no matter what size, and a continuation of the Fed’s emergency programs will be bearish for the U.S. Dollar and bullish for gold prices.