US Election Results: Best of All Possible Worlds for Gold
Jeffrey Nichols, Managing Director, Precious Metals Advisors
"Tuesday’s election outcome—with President Obama returning to the White House, the Democrats retaining a weak majority in the Senate, but without enough seats to overcome a Republican veto on important legislation, and a strong Republican majority in the House of Representatives—may be the best of all possible worlds for gold investors.
Just a month ago, on October 5, gold reached an 11-month high just over $1,795 an ounce. Since then, in the run up to yesterday's election, the yellow metal slumped as low as $1,672—reflecting the prospects that a Romney victory might bring a reversal in economic policies, a reversal that would be "unfriendly" to gold. Beginning late last week, as the polls shifted back in favor of Obama, gold again rallied, nearly touching $1,730 before settling down on speculative profit taking in paper markets." Read More
Hope, Change & Gold
Adrian Ash, BullionVault
"Tuesday's sudden and sharp rally in gold did not predict last night's party in Chicago. It was driven by leveraged traders getting whacked when the price crept above $1700. Selling gold short—in anticipation of further falls—has proved a foolhardy move plenty of times in the last five years of crisis. And Obama's second victory has so far only confirmed gold's jump against a backdrop of everything else sinking. Because true hope and real change are still pending. And outside the United States, investors the world over will need to start to believing in the levers and dials of U.S. politics once more to undo the 12-year bull market in that careless, unrusting lump.
The point runs deeper than the partisan sniping just endured by TV viewers and newspapers the world over. Because whoever had won last night, 'the American way [is] to make fools of pessimists,' claims TIME columnist Joe Klein. Whereas gold is the ultimate pessimists' investment, a hedge (at the very least) against politicians losing whatever control they thought they had and only making things worse with their meddling." View More
Four More Years of Precious Metals as the Top Performing Asset Class?
Peter Cooper, Arabian Money
"With President Obama safely back in the White House investors in precious metals can justly feel that the president's promise that 'the best is yet to come' is aimed at them. For gold and silver outperformed every other asset class in his first term, and there is nothing like political continuity.
Investors in precious metals have pretty much doubled their money since Mr. Obama was first elected. In that same timeframe, U.S. equities have been on a roller-coaster ride to nowhere. Bonds have done better but nowhere near as good as gold and silver." View More
U.S. Dollar, Gold Implications of Election
Axel Merk, Merk Investments
"As networks projected an Obama victory, there was a sea of red: the dollar is down versus currencies and gold. As pundits will shift the focus on the fiscal cliff, the market appears firmly focused on what may be more relevant: an Obama win favors a continuation of the current easy money policy. Had Romney won, Fed Chair Bernanke would have become a lame duck, undermining the credibility of the Fed's commitment to keep interest rates low way beyond the end of Bernanke's term in early 2014. With this uncertainty removed, the Fed's increased emphasis on employment is here to stay. The market rewards this certainty by bidding up gold, selling off the dollar versus all major currencies." View More
Post Election Trading Made Simple
Chris Vermeulen, The Gold and Oil Guy
"During August and September, investors flooded the gold market in anticipation of QE3. Since then gold has been drifting lower with profit taking and because of some slowly strengthening economic numbers in the USA. Gold looks ready for a run to the $1,800/ounce but may stabilize here for a few weeks first." View More
US Elections Boost for Yellow Metal
Jack Farchy, Financial Times
"Gold prices leapt to their highest level in two and a half weeks as the U.S. election delivered what analysts called 'the best result possible' for the bullion price.
The vote for a continuation of the status quo—with Barack Obama re-elected president, the Democrats in control of the Senate and the Republicans in control of the House of Representatives—could set the scene for a strong gold rally toward the end of the year, analysts and traders said.
Political gridlock in Washington and a steady stream of easy money from the Federal Reserve helped gold prices double during Mr. Obama's first term.
'All in all, gold could not have asked for a better outcome,' said Edel Tully, precious metals strategist at UBS." View More