Gold will gain from increased volatility and risk after Trump shooting; Trump victory could weaken USD and boost bullion prices – Analysts

(Kitco News – Mon. , July 15th, 2024) – Safe-haven assets like gold will likely benefit from the increase in market volatility and perceived risk in the wake of the Saturday afternoon assassination attempt on presidential candidate Donald Trump, while the increased odds of a Trump victory in November could weaken the dollar and boost the yellow metal, according to numerous market participants.

“Undoubtedly, there’ll be some protectionist or haven flows in the Asia early morning,” Nick Twidale, chief market analyst at ATFX Global Markets, told Bloomberg. “I’d suspect gold could test all time highs, we will see the yen getting bought and the dollar, and flows into Treasuries too.”

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, also believes gold will be among the assets to benefit from a near-term flight to quality.

“This weekend’s events will likely cause increased volatility on Monday open both in stock and bond markets,” Ozkardeskaya said. “We expect to see flight to safe havens like Swiss franc and gold. Bitcoin has reacted positively to the news as a result of knee-jerk flight to safety.”

Gold prices are continuing to trade in the elevated range above $2,400 per ounce, which they reached following last Thursday’s better-than-expected U.S. CPI print, with spot gold last trading at $2,415.22 at the time of writing for a gain of 0.22% on the session.

Trump said he was shot in the right ear after shots were fired at him at the Pennsylvania rally. His campaign said in a statement that he was “fine” after the incident, which saw him rushed from the stage by Secret Service agents. One attendee at the rally was shot and killed, and two others were in a critical condition.

Initial market commentary suggested the shooting of Trump at a Saturday rally in Pennsylvania may prompt traders to boost his probability of success in November’s election. Trump’s presidential bid has gained momentum across global markets after 81-year President Joe Biden flopped in the first presidential debate on June 27th.

According to the latest odds from PredictIt, the chances of Trump becoming president increased in the aftermath of Saturday’s attack.

Joe Gilbert, Senior Portfolio Manager at Integrity Asset Management, sees a pullback for risk assets, which is likely to benefit gold and other safe-haven investments in the short term.

“The Trump assassination attempt will definitely inject some uncertainty into markets,” Gilbert said. “Given markets are trading at all-time highs, it would make sense for the market to retreat from these levels as the potential for a more contentious and contested election seems more probable. We expect volatility to increase even as the odds of a Trump win seem to be getting higher odds.”

Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, wrote in an X post that a Trump presidency will likely weaken the dollar, boosting the price of gold, oil, and other commodities.

Gold/crude oil, leaning toward 40 next vs. 20 if Trump 2.0 – At about 30 barrels of WTI #crudeoil to an ounce of #gold, upward momentum in the gold/crude ratio may find fuel from ‘drill at will’ and the potential for Mr. Trump to pressure the dollar as explained in my colleague,… pic.twitter.com/bmVh6jFSF2

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com