Hillary Clinton win doesn’t mean market stability, says gold firm

Hillary Clinton securing the White House in the US election in under two weeks’ time will not automatically lead to stable markets, gold trading firm GoldCore has said.

Despite a fall in the price of gold in recent weeks and gains for US stock markets this year, Mark O’Byrne, research director at GoldCore, insisted there are still good reasons to buy gold.

Stock markets appear to be welcoming opinion polls that suggest Ms Clinton will win the presidential race because she is a known quantity to big investors. And gold prices have retreated as a result.

Markets detest uncertainty and the precious metal in the past has done best in times of economic dislocation.

However, Mr O’Byrne warned a Clinton victory may not lead to stability.

“It is true that if Donald Trump is elected that will lead to more market unpredictability,” Mr O’Byrne said.

“There is much less certainty about his economic policies and a concern that he would favour protectionist policies that would certainly affect the world economy,” he said.

He said that though markets favour a Clinton White House that huge challenges lie ahead for the US regardless of who wins the White House.

Gold had a strong run in the first six months of this year, having risen 25% in dollar terms and by 28% in euro terms, he said, driven primarily by fears about the fallout from Brexit.

Citing concerns about the long-term prospects for the euro and the fiscal problems in the US, Mr O’Byrne predicts gold won’t continue to fall in the medium term.

“The polarisation of politics in Europe is leading to a rise in anti-EU sentiment, with elements of both the left and right against the euro.

“The US is living beyond its means and whoever comes in faces monumental challenges. The 1% are doing well, but not the 99%. That is why Trump is so popular in the first place. Given that the dollar is the world’s reserve currency that can only be a positive for gold, traditionally seen as the safe haven in times of uncertainty,” he said.

He claimed market conditions are something similar to those after the 2008 election when Barack Obama swept into office on a tide of optimism, but then had to deal with “the mess” facing the country.

Since the start of the year, the price of gold has risen by around 18.5% both in dollar and euro terms.