Trump or Harris? Gold is the Winner!

Whether Donald Trump regains the presidency or Kamela Harris wins in November, gold is likely to emerge a winner after the Presidential election.

“The combination of geopolitical risks, fiscal concerns, and potential shifts in monetary policy, particularly in the wake of the U. S. presidential election, makes a bullish case for gold as a hard asset,” argues Ole Hansen, Head of Commodity Strategy for the Danish investment bank Saxo Bank and a veteran gold analyst.

Hansen points out that the U.S. budget deficit is likely to continue climbing under a Trump or a Harris administration. Trump is promising major tax cuts for corporations, without specific plans for spending cuts, while Harris appears to support a continuation of President Biden’s aggressive fiscal spending. “Either administration would inevitably expand the deficit in an economic slowdown,” predicts Hansen.

Regardless of the election, the Federal Reserve is in policy easing mode, with plans to continue pushing interest rates lower, making gold more attractive relative to assets that offer a yield.

Other gold-bullish factors will remain after November: geopolitical tension and the push among global central banks to “de-dollarize” through gold purchases. Trump, in particular, could intensify the later trend if he wins and imposes high tariffs, which would incentivize countries to trade outside the U.S. dollar system.

Finally, there is gold’s safe haven appeal. As the U.S. approached Election Day, the economy was slowing. Signs of a potential recession posed a major risk to high stock prices, highlighting the need for safe haven assets, particularly gold.