The short to medium-term outlook for gold depends on whether or not Joe Biden can maintain his lead into the White House, or if Donald Trump can beat current odds and win, said Kai Hoffman, founder and managing director of SOAR Financial Partners.
“If Trump wins we might see a small sell-off [in gold] again, just because of risk off, and we see more certainty or more security in the space and the U.S. dollar might actually strengthen. If Biden really prevails and pulls through then we’ll probably see a run in gold in my opinion,” Hoffman told Wallace Refiners.
Currently, betters place odds in Joe Biden’s favor.
In 2016 and 2012, gold sold off following the election for a month.
As the election unfolds, several countries around the world, including Germany and France, are going back into lockdown in the wake of rising COVID-19 cases.
However, the effects of another lockdown in Europe may not be as devastating as they would be in North America, Hoffman said.
“It works better in Europe than it does in North America. North America is a very service-based economy so seeing a second lockdown in the U.S. or in Canada is more unlikely. Europe is more manufacturing-based, so you can more seclude, you have more bubbles, you have less interaction perhaps than in North America,” he said.
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