Gold Price: Insider Reveals Surprising Reason Why Gold Prices Could Surge

This Could Be Big for Gold PricesThis Could Be Big for Gold Prices

If Donald Trump is sitting in the Oval Office this time next year, it may be a very good thing for gold prices.

Should Trump win the 2016 presidential election, says Greg Collett, the director of investment products at the Gold Council, gold prices will go up. Trump will boast to the world he has the Midas touch, claiming he can even make gold go higher. However, Collett has a logical and tidy explanation, which makes a lot of sense.

Indeed, Trump’s ability to raise gold prices has nothing to do with the tycoon himself. There will not be a reality show to make gold investing popular again. Collett even sees the possibility of Trump winning the presidential election as bullish for gold. This is because Trump’s ever more successful candidature—all the more likely given Hillary Clinton’s pathetic attempt of nicknaming him the “presumptuous nominee”—will raise the kinds of concerns that prompt investors to look for traditional havens such as gold.

It’s not so much that investors are worried about what he might do to the economy or to society. It’s more the fact that Trump’s success has been solely a product of his personality and charisma. As for actual policies, he has been an enigma. Few know, least of all Trump himself, what kind of presidency he might lead. This lack of clarity creates uncertainty. Uncertainty is great for the gold price and prompts average investors to buy it. (Source: “Donald Trump is great for Gold,” Business Insider, May 26, 2016.)

“He’s very unclear in his policies, and uncertainty tends to make people say, ‘Maybe I should have something a little bit in gold’,” said Collett. (Source: Ibid.)

Some of Trump’s positions have been so extreme as to lack credibility. Certainly, his deportation of Hispanics, great walls across the U.S.-Mexico borders like some figment of China’s medieval past, and his outright ban on Muslims are rather farfetched ideas.

Still, even as reasonable voters can see through the claims as efforts to win over the extreme voters to his side during the primaries, there is always that lingering doubt. In a Trump presidency, will the U.S. and Mexican companies be able to do business with one another? That concern alone might prompt voters, many of whom are also investors, to seek assets to buttress their savings from the market fall-out.

Another one of Trump’s uncertainties has a direct relationship to gold. Mr. Trump has made no effort to hide his preference for the gold standard, which ties the U.S. dollar—or any other currency—to the value of gold: “We used to have a very, very solid country because it was based on a gold standard,” a nostalgic Trump said during a television interview in New Hampshire last March. (Source: Ibid.)

Still, the gold bulls have more than Trump’s ambiguities to back their optimism. Concerns about a possible recession in China spreading to the rest of the world might cause the Fed to rethink its interest rate hikes in 2016. Between the recession fears, U.S. dollar devaluation prospects, and the overall haziness about what President Trump might do, gold bullion looks like a winner over the next few months and likely in 2017 as well.