(Kitco News) - While American voters continue to digest Thursday night’s 2024 Presidential debate, commodity analysts have said that gold could ultimately be the winner as the comments from President Joe Biden and former President Donald Trump did little to ease ongoing geopolitical and economic fears.
According to many pundits, the debate was fairly disappointing, particularly from the Democrats' point of view, as Biden was unable to coherently express his thoughts. However, Trump wasn’t the definitive winner as political analysts continue to point out his many lies.
“Between the two of them, gold won,” said Michele Schneider, Chief Strategist of MarketGauge.com. “No matter who wins the election in November, gold is going higher.”
While Biden has overseen a strong economy with a record-low unemployment rate and record-setting equity indexes, his administration also saw inflation pressures hit their highest level in 40 years.
While in office, Trump passed significant tax cuts and also oversaw low unemployment and a robust equity market, at least until the global COVID-19 pandemic hit.
However, both candidates have significantly contributed to the nation’s growing debt burden during their respective terms.
For many analysts and economists, U.S. debt levels are approaching critical levels and are on an unsustainable path higher.
Looking ahead, while inflation has dropped sharply from its 2022 highs, Schneider said that she didn’t get a clear message from either candidate on how they would handle a slowing economy with elevated inflation.
“I just don't see any sound economic policy on either side at this point with either one of these candidates,” Schneider said. “In this environment, I think it’s important to own some gold, and investors are going to find out that they don’t own enough.”
Many economists and political pundits have touted the benefits of the new A.I. revolution, expecting it will drive new economic growth without impacting inflation; however, Schneider said that this view is misguided as A.I. won’t be effective without power and a stable electrical grid. She added that the technology using A.I. can’t exist without more resources. She pointed out that this demand will drive commodity prices higher and keep inflation pressures elevated.
“In the face of progress and technology, we have not dealt with the reality that stuff just doesn’t come out of thin air. The reality is that technology does not evolve without natural resources,” Schneider said.
While all eyes are on gold as a geopolitical asset, Schneider said that she still expects silver to outperform in the precious metals space as industrial demand outpaces the supply.
As investors look to create a commodity portfolio to hedge against persistent inflation and geopolitical uncertainty, Schneider said that she would consider building a portfolio with 50% weighting in silver, 25% in gold, and 25% in a mix of other metals, including copper, aluminum, and platinum.
Schneider added that this commodity basket should represent about 10% to 15% of a broader portfolio.
As for where silver and gold are going, Schneider said that as long as gold prices stay above $2,300 an ounce and silver stays above $29 an ounce, the risks are to the upside.
