SMM News: the gold market continues to be trapped in the shock zone, with gold prices fluctuating slightly around 1930 US dollars / oz. But gold bulls remain bullish on its performance with the arrival of one of the most important risk events in the US election in the second half of the year.
Peter Grosskopf, chief executive of Sprott Inc, said the huge uncertainty brought about by the US election would greatly boost the safe-haven demand for gold.
Gold prices have fallen sharply after hitting an all-time high in August and have fluctuated above $1900 an ounce over the past few weeks.
Grosskopf pointed out that the approach of the US election will make investors focus on inflation, debt and a new round of stimulus, which will push up safe-haven demand.
For the two candidates, Grosskopf believes that if U.S. Democratic candidate Joe Biden wins gold, his policy of raising taxes and spending will push gold prices higher.
The coming of the general election will increase investors' interest in gold. There will be more uncertainty in the whole world and people will become more nervous. Everyone is waiting, and there will be more prices for gold. "
Gold has risen nearly 30% so far this year, making it one of the best-performing assets. In response to the epidemic, the gold market has soared as central banks around the world have loosened aggressively.
However, as the United States restarts the economy in many places, action on the gold price can weaken.
Grosskopf pointed out that concerns about rising inflation and the large amount of debt accumulated to stimulate the economy are emerging, and the flow of capital from the cash, credit and bond markets to the gold market will bring gold prices back to around $2050 an ounce next year.
"especially if Biden is elected, he will increase taxes and spending even more. The stock market will become relatively less attractive, the deficit will continue to rise sharply, and gold is undoubtedly a big hedge. "
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