Make Kitco Your Homepage
News Bites

Will U.S. Election Be a Brexit Repeat For Gold? – Jim Rickards

(Kitco News) - The U.S. election may have similar repercussions on the gold market as the shock of a surprise Brexit vote had on the metal during the summer, this according to one best-selling author and known gold bug.

“There’s very little doubt it’s priced for Hillary…it’s already expected. If Trump wins, it’s a shock. So, I would rather own the shock,” said Jim Rickards, chief global strategist for West Shore Group, on Bloomberg Surveillance Tuesday. “Gold is priced for a Clinton victory, which means it’s going to go up $130 an ounce, it’s going to hit $1,400 if Trump wins.”

As Rickards put it, markets have already priced in a Hillary Clinton victory and because of that, markets will not move much if the outcome comes to pass. However, the Trump surprise would have similar effects on the gold market as the Brexit vote, which saw the metal shoot up over 7% the following day.

Gold has seen sharp gains as Trump leads in Florida, a key battleground state that has 29 electoral votes up for grabs. According to many political pundits, Trump can’t win the White House without winning Florida.

Rickards explained that the Brexit trade was to short sterling and buy gold. For the U.S. election, the trade to be in is short the S&P 500 Index and long bullion.

“It’s exactly like Brexit,” he said. “I can’t believe it’s happening twice in 6 months or less.”

As more results come in, December gold futures are trading around $1,296 an ounce, up more than 1.6% on the day.

By Sarah Benali of Kitco News; sbenali@kitco.com

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
kitco news