Title: Gold Prices Forecast: Impact of US Elections on Investments Revealed
As the US elections approach, the outcome could have a significant effect on Gold prices. According to ABN AMRO’s FX strategist Georgette Boele, a Democratic Victory may lead to limited impact on Gold prices, while a universal tariff under a Trump presidency could result in lower Gold prices initially, with potential for reversal in the long term.
Gold prices to fall if Republicans win
Boele highlights the evolution of the Gold market, emphasizing its shift from a safe haven and jewelry market to a more investment-driven market. The introduction of Gold ETFs in 2003 has transformed Gold into a speculative asset, with factors such as the US Dollar, monetary policy, and real yields playing crucial roles in its price movements.
Under a Democratic Victory, Boele predicts modest support for Gold prices due to expectations of a slight decline in the USD and lower real yields, with prices likely to hover around $2,500 per ounce.
On the other hand, a Republican Victory could bring more complex dynamics. In the event of full tariff implementation, initial inflation, Fed rate hikes, and a strong USD could lead to a decline in Gold prices, potentially dropping below $2,000 per ounce. However, a subsequent weakening of the USD and decrease in real rates could pave the way for a Gold price rally, surpassing previous highs by 2024.
Analysis: How US Elections Could Impact Your Investments
In summary, the US elections could have a significant impact on Gold prices, depending on the outcome. A Democratic Victory may offer modest support, while a Republican Victory could lead to initial price declines followed by a potential rally in the long term. Understanding these potential scenarios can help investors make informed decisions to navigate the fluctuating Gold market and optimize their investment strategies for the future.