Gold prices have been on the rise throughout the world over the past few years. This is mainly due to the economic downturn and the volatility that has hit the markets since 2008. A few weeks ago, gold retails at about $1368, which was the highest in history. This is also a significant year in American elections with New York businessman Donald Trump squaring it out with former Secretary of State Hillary Clinton. Trump’s rise is quite dramatic, and many gold market watchers are speculating on the impact his potential presidency will
have on the gold prices.
Why Donald Trump Buys Gold? Trump has an extremely diversified portfolio with a self-reported net worth of $10 billion. Out of it, Trump has speculated that he could be having between $100k-250.This shows that in as much as they make a small portion of his portfolio,he still loves the precious metal. Trump has publicly supported the audit of the Federal Reserve which shows he supports the transaction of gold. This positivism means Trump might effect policies that will continue to push the gold prices upwards for the foreseeable future.
Trump victory will mean higher prices. Trump’s rhetoric could create uncertainty in US markets which could create greater volatility which in turn will push people to buy gold rather than stocks.The estimated prices for gold under Trump could be as high as $1850. Even then it seems that gold prices will still eventually inch up with or without a Trump presidency. Therefore it is harder to estimate how much of that impact will be due to Trump’s policies and sentiments.
Trump victory could result in even a higher gold prices
In January Trump berated China and Japan for devaluing their currencies which seem to benefit gold investors in the short term. Trump’s own estimation is that the devaluation of their currencies has cost the country between 4 million and 7 million jobs. The devaluation also led to strong dollar which makes American exports expensive and imports cheaper which in turn push people to gold. If Trump’s policies weaken the dollar, then the gold valuation will spike upwards. Since gold is dollar- valued, a weakened dollar will mean a more affordable gold.
Trump’s Plans Could Bankrupt America. Trump’s fear-mongering has also created a situation which might make the economic outlook shaky and push investors towards gold. Trump has also spoken out against immigrants though his remarks have been taken out of context. He has talked of documenting immigrants; sentiments that have been misconstrued to mean he will deport all immigrants. A hypothetical
deportation of the 11M undocumented immigrants could cause a 2% decrease in economy. The loss could range from $100 billion to $600 billion. Trumps temperaments tend to paint him as an unstable leader which predisposes him to create volatility in the stock markets.
Trump and the Markets. Historically, Carter, Bush II and Obama’s first term saw the highest volatility in in the prices of gold. Already gold prices have defied the expected volatility in 2016 and stayed on a general upward trend. Some of the forces that will shape the gold prices lie outside the power of the presidency. These include market stability in China, the health of the Eurozone, and the impact of Brexit. The American fiscal deficit, falling yields and weakening dollar would lead to an overall spike in the gold prices. The other significant impact on the dollar would be America’s decision to dump their gold stash on the market.
In conclusion, no matter who becomes president whether Trump or Hillary, gold will remain supported meaning the outlook will be positive. Overall a Trump win will still push more Americans to gold. Placing some of your savings and retirement holdings into gold is your surest hedge in financially unstable times like these. It is nearly 35% below its all time high of over $1,850 per ounce. Click here to request your free gold info kit from Regal Assets, one of the top ranked companies in the industry that specializes in Gold IRA investments.