The outcome of the US elections could have a large impact on Gold prices. If there is a Democratic Victory (partial or full) the impact on Gold prices would be limited. In case of a universal tariff under a Trump presidency, we would likely see lower Gold prices, while over the longer-term these moves would likely be reversed, ABN AMRO’s FX strategist Georgette Boele note.

Gold prices to fall if Republicans win

“The evolution of the Gold market from merely a safe haven and jewellery market to a market where investment decisions play a more crucial role is important. Indeed, since the introduction of Gold ETFs (March 2003) Gold has developed more into a speculative asset and behaved less as a safe haven asset. As a result, developments in the US Dollar, monetary policy and real yields have become dominant drivers over time.”

“Of course, there are still investors buying physical Gold for safe haven purpose but the flows into non-physical Gold have often been dominant. What do we expect for Gold prices under the different scenarios? If there is a Democratic Victory (partial or full) we think the Gold prices could be very modestly supported because we expect a modest decline in or a neutral USD and some lower real yields. We expect Gold prices to stay around $2,500 per ounce.”