As the drama of the Presidential election unfolds each day, surprising us with one revelation after another, I can’t be the only one wondering…
How can stocks possibly sustain their recent highs in the face of such uncertainty?
Not only are the candidates presenting sharply opposing economic platforms, but they are also inheriting a severe global economic environment with little room to maneuver.
On Monday, the U.S. Treasury Department warned that Britain’s recent decision to leave the E.U. has increased risks to U.S. financial stability. The price of crude oil has been dropping along with global demand, signaling a bearish economic sentiment that is spreading fast across global markets.
No wonder ABN AMRO is calling for $1,850 gold ahead.
Despite all this, today’s Federal Reserve policy meeting is still likely to result in zero changes to U.S. monetary policy. The Bank of Japan, however, may be forced to announce new stimulus this week.
This is a lot to take in all at once. But there’s good news for gold investors, no matter which candidate prevails.
Of course, there is the usual diversification value of gold and silver versus paper assets… precious metals can help to smooth out bumps in a retirement portfolio. When the metals markets dip, these can be great times to consider acting to gradually accumulate a desired position in gold or silver at a desirable price.
But the case for gold right now goes far beyond its diversification value alone.
Let’s hear what some experts have to say:
ABN AMRO: $1,850 Gold Ahead
Dutch Bank ABN AMRO thinks a Trump victory will support gold prices because his policies could damage the U.S. economy and stoke global market uncertainty.
Georgette Boele, ABN AMRO’s coordinator for forex and special metals strategy, points to Trump’s incendiary rhetoric and budget-stretching policy proposals as key factors that could cause gold to climb to $1,850/oz. over the coming years.
However, ABN AMRO thinks gold could also win in the event of a Clinton victory. According to Boele, this outcome could result in higher inflation, sluggish economic growth, negative interest rates and a weaker U.S. dollar. That is the sort of market in which gold prices see a lot of upward pressure!
Landi: Either Candidate Good for Gold
Vince Lanci, founder of Echobay Partners LLC, thinks Hillary Clinton is the candidate that is best for gold. He cites the chaos in the Ukraine, Iraq, Libya and Syria under Clinton’s leadership as proof that fiat paper-based assets might not do well if she becomes President.
Despite the wide policy differences between Clinton and Trump, Lanci believes that neither candidate will be able to use the White House to fix the systemic problems that our country faces. As such, he thinks the U.S. dollar will fall and gold prices will rise under either candidate.
No matter who wins, our next President will be contending with negative interest rates, futile central bank policies, a weaker U.S. dollar and global deflation.
Do our current candidates have the right solutions to our current economic crisis? Do they have the ability to carry these ideas out? I’m not feeling a lot of confidence there at the moment.
Even if your outlook is more optimistic, do you really think the stock market has much room for further appreciation from here?
“Politician-Proof” Your Portfolio
Time to “politician proof” your investments and retirement account and reconsider whether it is time to add more gold or silver.
Being prepared for the worst, while hoping for the best, is a wise strategy to follow in times like these. Market volatility is not going away.
Gold and silver coins in your safe or IRA give a level of security, privacy and portability no other asset can.
