Mid-Term U.S. Elections Will Drive Physical Gold, Silver Market – Perth Mint
BOSTON - (Kitco News) - The Nov. 6 mid-term elections could have a direct impact on the physical bullion market, according to the head of Perth Mint.
Richard Hayes, CEO of Perth Mint
Richard Hayes, CEO of the Australian mint, told Kitco News on the sidelines of the London Bullion Market Association’s 2018 precious metals conference that if Democrats regain control of Congress next week he would expect to see an increase in coin sales.
Hayes added that with President Donald Trump in office, a Democrat Congress would create a new environment of political uncertainty and gridlock in the U.S. He explained that if Democrats gain power in the House and Senate, it will be much more difficult for Trump to pass more business-friendly policies, which have driven economic growth this past year.
“If Trump doesn’t do well during the mid-term elections it will bring people back to the bullion market,” he said. “For many bullion consumers, Trump is their guy and with him in office and Republican’s controlling congress they haven’t had the need to buy gold and silver as an insurance policy.”
Along with geopolitical uncertainty, growing economic uncertainty will also continue to support the gold and silver market. Hayne’s comments come as equity markets continue to struggle to find momentum as they see their worst month since the financial crisis.
“A lot of investors aren’t looking at gold because they have been focused on equities,” he said. “If this correction continues then I would expect people to start talking about gold again.”
While the Perth Mint is one of the world’s biggest mints with its bullion coins circulated around the world, it has had to adjust how it promotes physical bullion, said Hayes. In an effort to reach out to younger, more tech savvy investors, the mint launched Goldpass, last month, a digital gold token that provides retail investors the ability to buy, sell and store gold via digital certificates. The digital gold is backed by physical metal stored at the mint.
The move into the digital market comes after the summer when the mint launched a gold-backed exchange traded product that can be exchanged for physical gold.
“We are very pleased with the demand that we have seen for these new products,” he said. “Demand for physical gold remains healthy but we just need to repackage gold to attract new consumers.”