November 4, 2016
Regardless of who moves into the White House this coming January, gold prices are set to zoom in the years ahead – in my view, more than doubling during the next President’s term.
What many Western investors – particularly Americans – still fail to realize is that investment demand for gold knows no boarders. Indeed, it will be the growth in physical demand for gold – from India and greater China – that drives gold prices to unheard of heights over the next several years.
Political and social developments – especially the growth in middle classes with investible incomes in these countries – will be more important than who’s occupying the White House.
But short term, what matters most to gold-price volatility during the run-up to next week’s vote is uncertainty:
- Uncertainty about Secretary Clinton’s legal situation and the on-going FBI investigation;
- Uncertainty about prospective trade, monetary, and fiscal policies depending on which candidate is elected;
- And uncertainty about financial-market and economic prospects under one or the other candidate.
We can only speculate how gold prices might react to the election of one or the other candidate.
Clinton is viewed as the candidate of the status quo – with little change in policies from the Obama Administration and, unless the Democrats gain control of the Congress, four more years of political gridlock in Washington.
My guess is that Wall Street and foreign stock markets would be relieved by a Clinton victory, with equity prices posting brief, but possibly significant, short-term gains --and gold giving up the gains it registered in the weeks immediately prior to the election.
On the other hand, Donald Trump is viewed as an unpredictable candidate whose policy proposals are arbitrary and capricious.
His tough, protectionist, anti-trade stance could trigger selling on Wall Street and equity markets around the world – pushing the global economy into recession, undermining the dollar, and boosting safe-haven demand for gold.
At the same time, Trump’s maverick behavior and his scary talk about prospective U.S foreign policy – with respect to relations with allies and foes alike – raises perceived geopolitical risks and could trigger a rush into gold.
Although the election is just days away, there remains the possibility of more surprises – from the FBI, from the Donald Trump camp, or even from the Clinton campaign – with implications for gold-price volatility in the days ahead.
October 9, 2016
Gold has once again surprised. This time, news from “outside the market” set in motion a chain reaction that knocked gold for a loop. First, the British confirmed the country was withdrawing from the European Union . . . and sooner than most had expected. This triggered an instant devaluation of the British pound and a corresponding rise in the ...
September 22, 2016
I don’t like to make short-term predictions about the price of gold – people who do are usually very lucky or very wrong. But times they are changing . . . and we are entering a new phase in gold-price action where expectations of Fed interest-rate policy will become less important and other, more bullish, gold-price drivers come to the ...
August 24, 2016
I recently sat down with Mining.com to talk about gold and the outlook for the yellow metal. Here's a summary of that conversation: Jeffrey Nichols has been a precious metal economist for over 25 years, so if there’s someone who knows every nook and cranny of the gold market, that is him. Like many others, including American lawyer and author ...
August 22, 2016
Although the price of gold is up some 25 percent so far this year, the metal still remains 30 percent below its all-time high of $1,924 registered in September 2011 – so there’s still plenty of room overhead for the price of gold to move higher – as I think it will – without excessive resistance. I’m no gold bug – but I have been “super bullish” ...
July 23, 2016
Although gold prices have had some difficulty sustaining recent gains above the $1365 per ounce level, the metal has nevertheless registered just about the best performance across virtually all investment classes over the past six or seven months. Over the past half year, the metal has rallied some 25 to 30 percent – far better than the major ...