12 Dec 2016
Guest Post, Gold Bullion Australia:
The Trump presidency sent shock waves all along the globe with stock markets tumbling from Asia to Europe. As stocks fell, precious metals went through a windfall, and in Australia, the situation was no different with a momentary rise in prices.
However it was shortly washed away as the market stabilised. The surge in prices was led by mass panic buying as stock markets went bearish, effectively triggering a ‘bull run’ in the precious metals market. This is because the unexpected US election result as well as the British move to remove itself from the European Union has had an adverse effect on stock markets all over the world with the Australian Stock Exchange (ASX) being no different.
But as the world markets rebounded shortly thereafter, gold and silver prices underwent a downward spiral and eventually stabilised near their pre- election rates.
However, the overall market trend in precious metals is expected to remain bullish in the long run for a variety of reasons, such as historically low global interest rates and stock market fluctuations. However, such expectations have continued to confound pundits not just in Australia but all over the world as well. Even as gold prices fluctuated wildly in the time period when the US elections took place with a steep increase recorded even as $35 billion were wiped away from the ASX on the night of Trump’s electoral victory.
However, in an absolutely stunning turnaround, more than $50 billion was added the very next day with a corresponding slump in precious metals as people regained their confidence under the assumption that ‘businessman Trump’ would be good for the global economy. This has shown that many Australians are no different from their counterparts all over the world, and in times of crisis, they turn to precious metals as people have been doing so since time immemorial.
When it comes to gold, many market pundits remain cautiously optimistic that there would be a slight rise in prices in 2017 if Donald Trump contributes to the global economy. On the other hand, a few unpleasant surprises ( Nuclear bombing of Syria for instance) would send stock markets in a tailspin and result in surging prices of gold and silver as well as other precious metals.
However, Silver’s wide spread use in solar panels is also a point to be considered. As Australia shifts to natural energy, the demand for silver is also expected to increase and lead to an increase in prices in the medium term.
With respect to Trump’s presidency and with his Republican party now firmly in the driving seat in the White House, Senate, and House of Representatives, the uncertainty that many investors have feared has been almost completely removed. Hence double-digit gains for the precious metal next year are a strong possibility. These glimpses can be seen in silver prices performance post-election results.
Many experts claim that the Trump presidency combined with Republican control of the other two branches will be good for the price of silver and gold in Australia.