Following a pullback from October 30th’s all-time high against the dollar, driven mainly by profit-taking, gold is again trending upward.
The U.S. presidential race is intensifying, with its tight margins possibly adding to market jitters.
Regardless of the outcome, significant political shifts can unsettle financial markets, and such uncertainty typically fuels volatility, and both can serve as catalysts for higher gold prices.
Gold isn’t just a commodity—it’s an economic vote cast in favour of stability when election outcomes are uncertain or contentious. Investors seeking peace of mind hedge their bets by holding gold during turbulent political cycles.
Donald Trump potential impact on gold price
Donald Trump remains a polarising figure, and his economic and regulatory policies are a potential cause for concern. His penchant for deregulation could lead to sector-specific disruptions, impacting investor sentiment and, consequently, gold prices.
Additionally, policy ambiguity under his administration, compounded by inflationary pressures and geopolitical tensions, could amplify gold’s appeal as a safe-haven asset, driving demand upward.
Kamala Harris potential impact on gold price
Kamala Harris, meanwhile, has outlined a vision marked by robust government expenditure on social programs, infrastructure, and climate initiatives.
These policies may exacerbate budget deficits, potentially weakening the dollar and stoking inflation fears. Investors could increasingly turn to gold as a hedge against inflation and a depreciating currency, pushing prices higher. Regulatory uncertainty and potential market instability under her administration would further support gold’s allure.
Presidential elections remind us that while leadership can change, the appetite for safe assets like gold are a constant in times of transition.
Fed’s November meeting
Beyond election-driven safe-haven demand, attention is also on the Federal Reserve’s November meeting. Gold prices have gained momentum from a softening dollar spurred by last week’s poor jobs report.
October payroll data showed the weakest growth since December 2020, reinforcing expectations for further rate cuts. Historically, interest rates and gold prices share an inverse relationship, with lower rates typically favouring higher gold valuations.
