Oil, Gold and US Presidential Elections

The week after US presidential elections will be an interesting week and perhaps one of the most volatile weeks of the year.

Gold has risen over 20% in the run up to the US Presidential elections, an unusual phenomenon as the past four US presidential elections gold prices dropped.

The candidates ,Hilary Clinton and Donald Trump, have very different policies and whoever wins the election will affect markets differently.

We expect gold to remain at high prices regardless to US presidential results. However, Trump’s win can increase gold price to $1500 as his wild policies are expected to bring a lot of uncertainty and risk to the markets. In this scenario, investors will seek save havens assets such as gold, silver, metals and even agriculture ( Wheat, corn, soybeans, etc.)

That being said, we believe that the latest polls putting trump ahead are not correct and Clinton will win the election so trades should be placed according to that prediction.

Oil will not be affected very much by the elections but we expect oil prices to fall as prospects for a deal to cut OPEC production will most likely not happen on November 30. This is forecasts as history shows that OPEC deals rarely take action.

To sum up, the best trade up until the election will be to hold a long position in Gold as we believe precious metals will go higher whatever US presidential election result might be.

This is a guest post written by Andrew Masters, from FIBO Group.