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A Trump Victory Could Drive Gold Above $1,400 - GFMS

(Kitco News) - A victory by Republican presidential candidate Donald Trump or a clear sign that he might win in the next two weeks could possibly drive gold prices up by at least 10% or more, this according to analysts at Thomson Reuters GFMS.

Republican Presidential Nominee Donald Trump
Republican Presidential Nominee Donald Trump speak at a rally in July. Photo by Joseph Sohm / Shutterstock.com

In its Third Quarter Gold Survey, the research firm broke down potential outcomes for the gold market ahead of the Nov. 8 election.

“On Balance, a victory for Trump (or possibly even just a clear sign that this is set to happen) would be likely to cause gold to rise above $1,400 and even $1,500 for the first time since April 2013,” the analysts wrote in their report.

Currently markets are expecting that Democratic candidate Hillary Clinton; according to Fivethirtyeight.com Clinton is leading in national polls with support at 49.3%; Trump is lagging with 43.3%.

The analysts noted that a Clinton victory represents a continuation of the status quo, leading to less market volatility, “causing the risk premium in gold prices to drop.”

The analysts explained that Trump is better for the gold market because his lack of political experience and foreign policy would lead to greater political uncertainty.

“Indeed, even if this proves not to be justified in the long run it appears likely that in the short run this perception outside America would boost safe haven buying,” he said.

While gold would be the biggest winner in a Trump presidency, the U.S. dollar would be a major loser.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

 

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