… “Buy Gold,” No Matter Who Wins Election.
The government of China has been the world’s largest buyer of gold over the past 10 years. The exact amount of their purchases is a state secret, but 5,000 tons is a reasonable estimate. The gold comes both from domestic mining (about 450 tons per year recently) and imported bullion (about 1,000 tons per year). The exact split between government purchases and private purchases in China is more difficult to estimate. But even if less than half the new gold is taken by the government, a 5,000-ton estimate is reasonable. China’s two main dealers for overseas purchases are ANZ Bank and HSBC. Arguably, HSBC has better information on global supply and demand for gold bullion than any bank in the world because of its privileged relationship with China. And what is HSBC saying about gold? They see it going much higher and recommend buying it now regardless of the outcome of the U.S. presidential election. Their price target if Trump wins is $1,500 per ounce and $1,400 per ounce if Hillary wins. Both targets represent substantial gains from current levels of about $1,290 per ounce. See the article below why HSBC is a true “insider’s insider” when it comes to the gold market. It pays to listen to them.’ Rickards –
The precious metal could reach levels not seen since 2013
By Julie Verhage & Sid Verma
There’s one certain winner of next week’s presidential election, according to HSBC Holdings Plc: investors in gold.
Although they deem a Donald Trump victory more supportive for the price of the metal than a win by Hillary Clinton, the bank’s Chief Precious Metals Analyst James Steel says it’ll enjoy at least a 8 percent jump whoever wins the race.
Both candidates have espoused trade policies that could stimulate demand, with gold offering a potential “protection against protectionism,” he says. Even the relatively more internationalist Democratic candidate has argued for the renegotiation of longstanding free-trade agreements. That’s positive for gold — even if “not on the scale of Mr Trump’s agenda.”
If the real-estate magnate triumphs, gold could rise to $1,500 an ounce, according to HSBC, up from around $1,289 at 10:55 a.m. in New York.
If Clinton wins, the price of the metal could improve to $1,400 an ounce by year end, Steel writes, adding that a Democratic sweep of Congress would further stoke demand for the metal owing to a possible boost in fiscal spending. Clinton’s not alone in having suggested stimulus through channels outside of monetary policy, with Trump at one point saying he would put at least half a trillion dollars to work.
James Butterfill, head of research and investment strategy at ETF Securities, echoed HSBC in predicting gold prices may rise as much as 10 percent within a year of a Trump administration, stimulated by policy uncertainty and the prospect of rising inflation, given the Republican candidate’s broadsides against the independence of the Federal Reserve.
QUICKTAKE Gold’s Ups and Downs
“Gold is seen as a hedge against political uncertainty, and President Trump would bring more political unpredictability than any president for generations, particularly over the U.S. Federal Reserve’s leadership and monetary policy strategy,” he wrote in a recent note.
Shifts in the partisan affiliation of the Presidency have historically had a positive impact on bullion, while it tends to perform poorly when there is no change in administration, the analyst notes, after observing gold-price swings that followed the 22 presidential elections since 1928.