We saw gold had another rough day last Friday contributed by two main factors, a stronger US dollar and a rise on stock markets.
Gold futures in New York for delivery in August, the most active contract, dropped to a low of $1,319.40 in early trade before slowly crawling its way back up at the close. If we compare this to two weeks ago, gold closed at a two-year high of $1,368.
However this is the best annual performance in decades for metal. Year to date the metal remains higher by 24% or some $270 an ounce.
Georgette Boele of ABN Amro investigates and charts gold movements during US presidencies going all the way back to Gerald Ford 1974–1977 term to discover the possible effect on the price during a Hillary Clinton or Donal Trump presidency.
Boele says during the 1980s and 1990s, gold was first and foremost regarded as a hedge against inflation and during the Presidencies of Ford, Carter, Reagan I, Reagan II, George Bush and Clinton I, the consumer price index and gold prices followed suit.
Trump victory could result in even higher prices
If Trump were to become President, gold prices will continue to remain strong, because we expect that his policies will be inward looking and will weaken the basics of the US economy. As well as this his actions could create domestic and international uncertainty making it highly likely that there will be a substantial rise in gold prices towards USD 1,850 per ounce over the coming years