Can two combative politicians, slugging it out on national television, actually spike the price of gold? Based on the numbers from this week’s Trump-Biden debate, it appears to be true. The price of gold rose in the week preceding the debate.
Gold prices are expected to rise even higher as Americans scramble for safe-haven assets in the midst of a politically uncertain climate. The election is on November 3rd. The debate earlier this week did not provide much to assure the people that stability will come after that.
Gold is a “Very Good Hedge” Ahead of US Election
In a recent article published on CNBC, UBS regional CIO Kelvin Tay described gold as a “very good hedge” for times of uncertainty like the US Election. “We like gold,” Tay said. We think that it’s likely to hit $2,000 per ounce by the end of the year.”
UBS is not alone in their optimism. Analysts at Wells Fargo agree. Their gold price forecasts, released in July, project that gold could rise all the way up to $2,300 by the end of 2021.
“We’re buyers of gold,” stated John LaForge, head of real asset strategy at Wells Fargo, in a Kitco article this week, “We view gold at these prices as a good buying opportunity and, as evidenced by our 2021 year-end targets, expect higher gold prices.”
Dollar Slide, Stimulus Hopes Drive Gold to Weekly High
The presidential debate isn’t the only factor driving gold prices higher. According to Nasdaq, prospects of a new economic stimulus bill may be contributing to a declining dollar.
“Better prospects for stimulus tend to weaken the domestic currency and support gold and silver,” said David Meger, director of metals trading at High Ridge Futures.
House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin met twice this week to discuss the stimulus package, and the two sides are reportedly closer to striking a deal.
Reuters is reporting that gold futures have risen 0.3% at $1,902 per ounce this week and the dollar index fell 0.2% against foreign currencies. They attribute the movement to increased optimism over a US economic stimulus package, helping gold rise more than 25% this year.
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