UNITED STATES November 10 2016 11:36 AM
NEW YORK (Scrap Register): A Trump US presidential victory signals $1,500 an ounce for gold and $24 for silver in the intermediate term, according to Nick Barisheff, President and CEO of Bullion Management Group.
Trump voters have now injected an unprecedented level of uncertainty into global financial markets. Investors prefer clarity, and until President-elect Trump fully clarifies his economic, trade and foreign policy positions, investors will be in a high-alert state of uncertainty. Roiling markets will compel investors to purchase safe-haven assets, especially precious metals, said Barisheff.
“The mainstream financial media, market analysts and fiscal academics continue to overlook the fundamental reasons to own bullion,” Barisheff added. “In one word, this oversight boils down to 'uncertainty.' Americans anxious about their future or their trust in large government and financial institutions chose to vote for President-elect Trump.”
Barisheff emphasizes that the gold price has a strong historic correlation to the growth of the US national debt of about 90%. "This correlation diverged in 2011, and in order to reflect the current $20 trillion in total debt, the gold price should be at least $2,000 per ounce," said Barisheff.
Trump's platform promise of greater infrastructure spending and tax cuts will result in an acceleration of an already exponentially rising debt.
For investors seeking precious metals as a safe-haven option, Barisheff points out that not all precious metals investments are created equal.
"Mining stocks can offer short-term leverage to a rising gold price, but they can magnify losses in a declining stock market. Derivatives and proxies of physical bullion, such as ETFs and futures contracts, masquerade as bullion, but they do not offer the superior wealth preservation and appreciation of physical bullion held on a secured, allocated and insured basis," he noted.