Gold set for further gains as Biden gets Congress green on U.S. presidency


Gold prices edged higher to $1,922/troy ounce, a day after Donald Trump’s supporters stormed the US Capitol Hill in a bid to quash the election results for presidency which he lost to Joe Biden.

Despite the drama, investors were enthused by two election wins in Georgia by Democrat candidates, which will give the incoming Biden control over both houses of Congress that should help provide more fiscal stimulus.

“While the safe haven in gold is gone, the control of the US senate will mean that they will be able to comfortably push the stimulus package,” said Gnanasekhar Thiagarajan, director at Commtrendz Risk Management.

“The outlook is still bullish for gold. That has not changed at all,” he added.
Thiagarajan thinks that gold is poised to rise solidly to $2,200/troy ounce by June globally, while Indian prices will climb in a more muted fashion to around 60,000 rupees per 10 grams from 50,000 rupees currently.

He is betting that dollar weakness will continue in coming months, while more stimulus measures will drive up US inflation in an unprecedented way, thereby creating more safe haven demand for gold.

Mike McGlone, analyst with Bloomberg Intelligence, expects gold’s current resistance level of $2,000/ounce to turn into a support level this year due to the higher liquidity.

Price correction

Noting that the metal had about a 15% correction in prices in the second half of last year following a rise to all-time highs of above $2,000 an ounce, McGlone says the correction “may have simply refreshed the gold rally.”

“If stock market volatility continues to rise, primary metals stand to be a primary beneficiary,” he added.

A rise in oil prices following Saudi Arabia’s decision to voluntarily cut output by an extra 1 million barrels per day is also expected to further add to gold’s price strength.

Analysts expect crude oil prices could reach between $50-$60/barrel this year, which will again spur inflation and thereby demand for gold.

However, demand in India, which is a key consumer, is unlikely to pick up much until the summer months due to relatively fewer auspicious occasions before the mid-year.

According to the Hindu calendar, an inauspicious period for gold buying that started mid-December will only end in mid-January.

However, there are no discounts prevailing in the local market either, which shows the buying sentiment is far more stable than what it was during the nationwide lockdown that was clamped  in late March last year.

Biman Mukherji is a columnist and consulting editor at He has worked for international news organisations such as Reuters, The Wall Street Journal as well as for newspapers like The Times of India. He can be reached at

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