SMM News: the US stock market is rising, which is seen as one of the market signals that Biden's lead is expanding in the opinion polls. At present, more and more analysts believe that the competition in the US general election will not be as fierce as expected.
But some investors believe it is too early to conclude that the election will not wreak havoc on the market and that gold will benefit from recent market uncertainty.
Analysts at the capital management giants, including State Street Global Investment and Jingshun Investment, believe that Trump will not easily throw in defeat and that the election could turn into a protracted war. Such concerns will revive demand for gold.
Kristina Hooper, chief global market strategist at Invesco Investment, said: "although some polls show that Biden's lead is expanding, I don't think the risk of the election has gone down, although I know a lot of people think so. A lot more could happen in the market between now and the end of the election, and I'm sure gold will benefit from it. "
Data show that yellow prices soared 30% in the first eight months of 2020, but lost momentum in September. With the rebound of the dollar, gold prices have shown a significant downward trend for the second month in a row. Although gold prices recorded their biggest rise since August last week, gold is expected to be more volatile this week as congressional negotiations on stimulus policies take a turn for the better.
In response to the above situation, Hua qi Group believes that the precious metals market may have "underestimated the risks brought by the election." The qi has been firmly bullish in recent times, and the bank said late last month that concerns about election uncertainty could push gold prices to record levels by the end of the year.
George Milling-Stanley, chief gold strategist at State Street Global, agrees that uncertainty will push up gold prices. "We have never experienced such a strange presidential election and everything in the market is uncertain."
Trump and Biden held an unusually heated debate last week, highlighting the growing tensions in the run-up to the election. Markets have been preparing for a possible controversial outcome since Mr Trump said last month that he would not promise a peaceful transfer of power if he lost the election. The Chicago Board options Exchange volatility index, or panic index, VIX, has risen for six consecutive days, the longest straight rally since 2018.
Wayne Gordon (Wayne Gordon), executive director of global wealth management for commodities and foreign exchange trading at UBS, said in an interview: "We have been fooled by opinion polls before. In fact, there is still a lot of uncertainty about the outcome of the election. For investors who want to hedge against the coming market turmoil, gold remains an excellent diversification tool in their portfolios. "
It is reported that Gordon suggested buying gold in March, when the price of gold plummeted as heavy losses in risky assets forced some investors to sell gold to raise cash. But the rest of the story is clear: gold has risen more than 30% since the collapse in march.
Of course, there are some potential headwinds for gold bulls, including a slowdown in demand from central banks this year and the recovery shown by the dollar in September.
However, Commerzbank reminded investors in a new research report that while the US election posed the greatest political risk, it was only one of many potential factors that could support gold prices. The bank said the UK-EU trade negotiations, the rapidly rising global debt level, the difficult delivery of the US stimulus package and the low interest rate environment around the world were all important positive for gold prices.
Michael Cujino (Michael Cuggino), president and portfolio manager of (Permanent portfolio Family of Funds), a family fund of permanent portfolios, agrees that gold prices will strengthen in the long run, regardless of the outcome of the election.
"at present, overall real interest rates in the United States are negative, and if the Federal Reserve and Congress provide more liquidity, US and global inflation expectations will rise, and gold prices should very much continue to rise." he added.
There is no doubt that the focus of the gold market in the coming weeks will remain on the US election. Kujino reminded investors to pay attention to Trump's previous statement that a national mail vote in which states automatically send ballots to each registered voter is "rigged" and "unfair."
The above remarks are bound to raise concerns among investors about the controversial results of the vote. And this kind of worry is a rare boon for gold.
