Despite all of the short term uncertainty as the US election hangs on a knife edge, the bigger picture continues to strongly favour gold, whether President Trump remains in the White House or hands over to Joe Biden in January, according to the Danish bank, Saxo Bank.
While gold is holding steady as investors wait to see what happens next, the underlying factors which favour a bull run remain in play; namely the continued increase in coronavirus infections and the huge damage done to the economy. In the shorter term, the type of stimulus package agreed could impact on gold and create an opportunity to buy but, this will be followed by strong price gains.
Saxo Bank’s head of commodity strategy Ole Hansen said, “No matter who is elected, the virus continues to hurt the economy and that deterioration will mean that governments will have to act. At this point, the U.S. election is not a game-changer that will shift the strong fundamentals in play in the gold market.”