Gold never sleeps? Regardless of the script of the US election, the gold price is expected to continue to rise
Saxo Bank's Head of Commodity Strategy, Ole Hansen, stated that geopolitical risks, fiscal concerns, and potential changes in monetary policy, especially after the US presidential election, have driven the rise in gold prices. Gold has risen by over 20% year-to-date and reached a high of $2531.75 in August. Gold's performance has surpassed the S&P 500 and Nasdaq 100 indices, demonstrating its attractiveness as a hard asset. Saxo Bank is optimistic about the future trend of gold, believing that fiscal deficits, safe-haven demand, and the Federal Reserve's monetary policy will continue to support gold prices
According to the Wisdom Financial APP, gold has recently shown strong performance, rising more than 20% year-to-date due to a series of factors. In August, it reached a high of $2531.75, making it an attractive investment.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated that geopolitical risks, fiscal concerns, and potential changes in monetary policy, especially after the U.S. presidential election, collectively provide reasons for bullish sentiment towards gold as a hard asset.
As of early September this year, gold has easily outperformed the S&P 500 index, with a gain of over 22% year-to-date compared to around 15% for the S&P 500 index and 12% for the Nasdaq 100 index. At the time of writing, spot gold rose by 0.10% to $2519.00 per ounce.
Saxo Bank remains optimistic about the future trend of gold and listed the following reasons:
Excessive fiscal spending. The uncertainty surrounding the upcoming U.S. presidential election has brought strong anxiety to fiscal policy and overall market stability. "In an economic slowdown, any government will inevitably expand the deficit. It seems that neither party will implement fiscal austerity measures, which will increase inflation risks, benefiting gold."
General safe-haven appeal. Gold has always been a safe haven during economic difficulties. "If we are heading towards a recession, the economy may be about to end the incredible stock market rally, and the bond market and its recent 'yield curve inversion' seem to be telling us this."
Fed rate cuts. Whether the economy is experiencing a slight slowdown or a full-blown recession, the Fed's monetary policy decisions will play a crucial role in shaping the trend of gold. A lower interest rate environment enhances the attractiveness of gold.
Geopolitics and "de-dollarization." Furthermore, the broader global environment characterized by geopolitical tensions, central bank efforts to de-dollarize, and economic uncertainty continue to support gold demand.
Saxo Bank also emphasized the meaning of the term "hard asset," stating that gold should always be seen as something that maintains its value rather than something whose actual value is expected to rise significantly. Hansen suggested that investors may continue to view gold as a tool to hedge against economic and policy uncertainties