Analysts predicts Gold price to rise on back of US election
Gold, the traditional store of wealth and a so-called safe haven, is set for a price rise on the back of the US presidential election, regardless of who wins.
Some analysts are putting a $US100 premium on it if Democrat Hilary Clinton wins.
That jumps to $US200 if Republican Donald Trump becomes the president.
Monetary Metals’ Bron Sucheki said given the global uncertainty that surrounds the outcome of the election, the price could go even higher.
“Gold is a classic asset class that investors run to when there’s any uncertainty.
“I think the US election sure meets the definition of uncertainty if ever there was one.”
Analysts say investors are already piling into physical gold and paper gold as a hedge against currency concerns.
The British pound dropped to its lowest level in 30 years in the wake of the Brexit vote and is yet to recover much ground.
At the same time, the price of gold soared.
“The uncertainty isn’t just about the election outcome, but even after the election, how will the new president deal with the potentially hostile Congress and whether they’ll be able to get their policies through,” Mr Sucheki said.
He said traditional gold buyers would be on track to buy even more gold.
“[There’s] always strong demand out of India and China, and China has overtaken India as the as the biggest buyer.
“In part that’s because they’ve liberalised their gold market, they’ve been very controlled and are opening up to make their gold market more sophisticated.
Economist says a Trump policies will drive gold even higher
Independent analyst Saul Eslake believes a Trump administration would further drive up the price of gold once it implemented its policies.
“Besides building walls and hiking up import tariffs, one of the other things that worries me is his [Trump’s] attitude towards the independence of the US Federal Reserve, America’s central bank.
“He seems intent on emasculating that as an independent institution by stacking it with political partisan employees, and undermining its capacity to act independently of political pressure.
“If he does, there’ll be a drop in general confidence in the US economy and the US dollar.
“And if the US dollar falls, history suggests there would be an increase in the gold price.”
Source: ABC
