Is Trump Success a Factor in Rising Gold Price?

Finance and Trade
03/03/2016 07:57

After three years in which the price of gold declined, the yellow metal saw a resurgence in 2016, and that is continuing this year so far. Gold's approximate 17% rise since the start of 2016 has been attributed to geopolitical turmoil, the health of the global economy and financial system, the impact of the slump in oil prices, uncertainty about the future of the European Union and the possible fallout from a Brexit, declining global stock markets, skepticism about further rate hikes in the United States and negative interest rate policies in a growing number of developed economies, initial indications that inflation may be creeping back into the financial system making gold attractive as a hedge, and a realization that gold at $1,000 an ounce was an historical bargain price.

Now, the likelihood that Donald Trump will be the Republican Party's candidate for president is rattking markets and pushing investors into the relative safe harbor of the gold market, reports the prestigious Wall Street Journal. David Govett of London-based commodities broker Marex Spectron, is quoted as saying that Trump’s candidacy makes the precious metal a smart place to hide out for the next few months,” reports. “The mere thought would suggest a good opportunity to buy gold,” said Govett. “Who knows what could happen should he be handed the keys to the White House,” he added. The paper also quotes James Sutton, a London-based portfolio manager on the global natural resources equities team at J.P. Morgan Asset Management which has $1.7 trillion in assets under management, as saying: “If there’s any uncertainty regarding the U.S. election and the potential for a slightly off-center candidate, whether that be Sanders or Trump winning the election, then I can see a scenario where that’s bad for the dollar.”