Election results and market reactions

Goldman Sachs has looked into the issue. Should a Republican presidency emerge, a stronger US dollar is expected. Dollar strength or weakness usually influences the gold price. Shortly before the debate between Trump and Biden, there were movements towards a stronger US dollar. Normally, the market tends to focus on the political impact of the election result relatively late in the election cycle. According to Goldman Sachs, a Trump victory could reinforce inflation. Early hedging, and gold is considered the best protection against inflation, is recommended.

Goldman Sachs forecasts a gold price of USD 2,700 per ounce by the end of 2024. This is not only due to the election result, but also because of the hunger for gold on the part of central banks and Asia. Gold is becoming increasingly important as a reserve asset, not only for central banks, but investors are also likely to increasingly turn to gold as a safe haven. Central banks had accumulated almost 36,000 tons of gold by autumn 2023. That was a new record. At the same time, investor and central bank confidence in the US dollar is declining. Investors rely on gold as a long-term store of value, with no risk of default.

Added to this is the debt of the USA. And among other things, Trump and the Republicans are planning to reduce the Fed's independence. This would drive up inflation and make gold more attractive. However, if the Democrats win, this should also strengthen the gold price in the medium to long term. This is because there is then a threat of increases in corporate taxes, which will reduce profits. Either way, the economic environment is uncertain, and gold is likely to be the winner. This includes gold companies such as Collective Mining and Osisko Development. 

Collective Mining - https://www.commodity-tv.com/ondemand/companies/profil/collective-mining/ - owns the Guayabales project in Colombia, which has a high-grade copper-silver-gold-tungsten porphyry system. 

Osisko Development - https://www.commodity-tv.com/ondemand/companies/profil/osisko-development-corp/- is developing gold projects in Canada, the USA and Mexico. The focus is particularly on early producing projects. 

Current company information and press releases from Osisko Development (- https://www.resource-capital.ch/en/companies/osisko-development-corp/ -) and Collective Mining (- https://www.resource-capital.ch/en/companies/collective-mining-ltd/ -).

In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.

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