Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

U.S. Election Results: Best of All Possible Worlds for Gold

IMG Auteur
Published : November 08th, 2012
471 words - Reading time : 1 - 1 minutes
( 1 vote, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...

 

 

 

 

Tuesday’s election outcome - with President Obama returning to the White House, the Democrats retaining a weak majority in the Senate, but without enough seats to overcome a Republican veto on important legislation, and a strong Republican majority in the House of Representatives - may be the best of all possible world’s for gold investors.


Just a month ago, on October 5th, gold reached an 11-month high just over $1,795 an ounce. Since then, in the run up to yesterday’s election, the yellow metal slumped as low as $1,672 - reflecting the prospects that a Romney victory might bring a reversal in economic policies, a reversal that would beunfriendlyto gold. Beginning late last week, as the polls shifted back in favor of Obama gold again rallied, nearly touching $1,730 before settling down on speculative profit taking in paper markets.


Gold prices are likely to remain volatile, continuing to exhibit big day-to-day and week-to-week ups and downs as the market sorts out the long-term consequences of four more years like the last four years - four more years of recession-like economic activity or worse, four more years of fiscal gridlock with annual trillion-dollar federal deficits, and most importantly for gold-price prospects, four more years of accommodative Federal Reserve monetary policies.


With the election now behind us, the market’s short-term attention will re-focus on possible Federal Reserve policy initiatives that may be discussed or even initiated at the December 12th FOMC policy-setting meeting. There is already talk of further quantitative easing, expectations of which could soon become a strong up-side price driver.


From a longer-term perspective, the Obama Administration will likely continue to endorse aggressive monetary stimulus as the only game in town to counter recessionary tendencies in the U.S. and global economy. Moreover, when Chairman Bernanke’s term expire in 2014, President Obama is likely to appoint another monetarydoveto head the Fed.


Similarly, the financial markets (including the market for gold) will increasingly react to the impendingfiscal cliffmandating a combined $500 billion in tax increases and spending cuts beginning at the start of the new year - that is unless Congress and the Administration can agree to a more tolerable solution to American’s fiscal profligacy - or more likely, Washington will simply “kick the can down the road,” by agreeing to revisit deficit reduction at some later date.


However this sorts itself out, America is following Europe down the road toward ill-timed fiscal restraint, restraint that will only exacerbate recessionary tendencies, and force the Fed to counter with still more stimulative monetary policies.


These and other positive price drivers and physical market fundamentals could form a “perfect stormfor gold in the closing weeks of 2012 - and, quite possibly, we could see the metal approach or even surpass its record high by year-end or early 2013.

 

 

<< Previous article
Rate :Average :5 (1 vote)
>> Next article
Jeffrey Nichols, Managing Director of American Precious Metals Advisors, has been a leading gold and precious metals economist for over 25 years. His clients have included central banks, mining companies, national mints, investment funds, trading firms, jewelry manufacturers and others with an interest in precious metals markets
WebsiteSubscribe to his services
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Here's What Will Send Oil Prices...
05 Marovertheedge
"Admittedly there has been a production surplus since the beginning of 2014 but that is nothing new and is forecast to be back in balance by the en...
Another Clinton Scandal
05 Marovertheedge
O, Mr Hoye you must have really infuriated the Clintonistas. Before I voted, you only had 1 vote that was a one star. I tend to think ...
Financial Repression Authority w...
03 Marovertheedge
"The US is only about 50% of global market cap but most US investors have a 'hometown bias" of having 70% of their portfolio in US securities. Fabe...
Bondholders “Bailed In” In Austr...
03 Marovertheedge
"“Bail-in is now the rule” as Irish finance Minister Michael Noonan warned in June 2013. Noonan admitted that the move to not maintain deposits as ...
Bondholders “Bailed In” In Austr...
03 MarArgus
Shortly after the Cyprus test run, Canada's budget document made provision for bail-ins in the event of significant 'systemic risk' to the banking ...
Illinois Pension Plans 39% Funde...
02 Marovertheedge
And it gets even worse. The unfunded pension liability monies aren't invested and never will be. You can't pay pensions out of an unfunded ...
China is about to overthrow Lond...
28 Febneville
This a good slap in the face for the downright crooked bullion banks,traders that have been front running ie algorythm trading etc It had to ta...
A Salvo in the Battle for the Go...
27 Febovertheedge
I would argue that the devil is in the details, i.e. the definition of money. What the people of the US are using is currency. Currency bei...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
TristarTOG.TO
TORC Oil & Gas Ltd. Announces 2014 Fourth Quarter and Year-End Financial & Operating Results
CA$ 10.17+2.52%Trend Power :
Financials
Altius Min.(Ag-Au-Co)ALS.TO
and Callinan combination to create a diversified mining royalty company leader
CA$ 12.05-4.89%Trend Power :
Corporate news
Tahoe ResourcesTHO.TO
Declares Third Monthly Dividend For 2015
CA$ 16.23+1.37%Trend Power :
Corporate news
Sprott Resources(Ag-Au-Co)SCP.TO
Resource Corp. Announces 2014 Annual Results
CA$ 1.28+2.40%Trend Power :
Corporate news
Vista Gold(Cu-Le-Zn)VGZ.TO
. Announces 2014 Results and Provides Update on Recent Activities
CA$ 0.47+11.90%Trend Power :
Corporate news
Major DrillingMDI.TO
Announces Third Quarter Results and Declares Dividend
CA$ 6.43-0.16%Trend Power :
Corporate news
UR-Energy(Ur)URE.TO
Releases 2014 Year End Results
CA$ 1.32+14.78%Trend Power :
Financials
Rockwell(Cu-Gems-Ni)RDI.TO
Announces Filing of Preliminary Short Form Prospectus
CA$ 0.22-13.46%Trend Power :
Corporate news
Cardero Res.(Ag-Au-Cu)CDU.TO
Announces Proposed Reverse Takeover of Artha Resources
CA$ 0.03-14.29%Trend Power :
Corporate news
Goldcorp(Cu-Le-Zn)G.TO
declares third monthly dividend payment for 2015
CA$ 25.88+1.69%Trend Power :
Corporate news
Comments closed
Subscribe to 24hGold’s daily market briefing
  • Prices and data of precious metals in 119 currencies and world mining companies
  • Daily analysis of the economy, markets and more
  • Free, daily and indispensable
Stay informed, subscribe now !
* Your email will never be shared.