Gold and the US Presidential Elections

Recent history shows us that in the run up to and following the 3 previous US presidential elections the gold price has pulled back slightly, but that may be about to change this year as Donald Trump attempts to enter the white house which just 5 months ago seemed unattainable.

The question is what has a potential Trump presidency got to do with the price of Gold?

Well for one, it is the first time in recent memory where the 2 presidential candidates (Hilary Clinton and Donald Trump) have differed so much on Foreign and domestic policy with Clinton promising no major changes while Trump is at the other end of the scale.

The potential first woman president of the United States has vowed to keep current free trade agreements intact, while also upholding the country’s allegiance to NATO which includes defending allies in the event of a possible attack which fall under article 5 of the NATO treaty that states an attack on one is an attack on all.

On the other hand Trump has taken aim at some of America’s trade partners and especially China, by promising introduce trade tariffs which he claims will stop the flood of goods into the country and bring back jobs to the US.

In an even bigger bombshell Trump noted in an interview with the New York Times that The US would not necessarily come to the aid of fellow NATO members in the event of an invasion and especially if they were not living up to their financial commitments to the military alliance.

Gold has risen by over 25 percent so far this year which many attribute in some part to Donald Trump’s rhetoric and wild polices, which if implemented would cause immense global uncertainty and see investors flock even more to the safe haven of the precious metal.

So where is the Gold price headed to from here?

With the presidential election just over 2 months away the chances any major pullback in the price are quiet slim while after the presidential election anything is possible with potential chaos in the financial markets

Some such as Analysts at Dutch investment bank ABN Amro claim that gold could hit $1,850 an ounce in the unlikely event of a Trump presidency.

This article is brought to you by Andrew Masters from FIBO Group forex brokers.