Buy gold no matter who wins the US election, HSBC says
NEW YORK – There's one certain winner of next week's presidential election, according to HSBC Holdings investors in gold.
Although they deem a Donald Trump victory more supportive for the price of the metal than a win by Hillary Clinton, the bank's Chief Precious Metals Analyst James Steel says it'll enjoy at least a 8% jump whoever wins the race.
Both candidates have espoused trade policies that could stimulate demand, with gold offering a potential "protection against protectionism," he says. Even the relatively more internationalist Democratic candidate has argued for the renegotiation of longstanding free-trade agreements. That's positive for gold — even if "not on the scale of Mr Trump’s agenda."If the real-estate magnate triumphs, gold could rise to $1 500/oz, according to HSBC, up from around $1 289 at 10:55 a.m. in New York.
If Clinton wins, the price of the metal could improve to $1 400/oz by year end, Steel writes, adding that a Democratic sweep of Congress would further stoke demand for the metal owing to a possible boost in fiscal spending. Clinton's not alone in having suggested stimulus through channels outside of monetary policy, with Trump at one point saying he would put at least half a trillion dollars to work.
James Butterfill, head of research and investment strategy at ETF Securities, echoed HSBC in predicting gold prices may rise as much as 10% within a year of a Trump administration, stimulated by policy uncertainty and the prospect of rising inflation, given the Republican candidate's broadsides against the independence of the Federal Reserve.
"Gold is seen as a hedge against political uncertainty, and President Trump would bring more political unpredictability than any president for generations, particularly over the US Federal Reserve’s leadership and monetary policy strategy," he wrote in a recent note.
Shifts in the partisan affiliation of the Presidency have historically had a positive impact on bullion, while it tends to perform poorly when there is no change in administration, the analyst notes, after observing gold-price swings that followed the 22 presidential elections since 1928.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation