Comparing Trump and Harris’s Economic Policies
One primary factor that could influence gold prices is the economic policies proposed by each. Beginning with Trump’s approach, it’s worth noting that his presidency was marked by fiscal stimulus policies, which included significant tax cuts and deregulation. These tactics aimed primarily to bolster economic growth. These policies, in theory, can potentially put upward pressure on inflation and thereby gold prices. However, inflation remained tepid throughout Trump’s term, resulting in a somewhat indirect influence on gold prices.
On the other hand, Kamala Harris has expressed a willingness to undo some of Trump’s tax cuts, particularly for wealthier Americans and large corporations. Harris has also highlighted the need for increased regulation, especially pertaining to environmental issues. If implemented, a rollback on tax cuts could slow economic growth in the short-term, potentially leading to increased economic uncertainty. Given that investors often seek refuge in gold during uncertain times, such a scenario could result in increased gold prices.
Trade Policies and Their Impact on Gold
Trump’s aggressive approach to trade, especially with China, often led to escalated market volatility. The uncertainty surrounding the trade negotiations was a significant factor driving up gold prices during his term. These trade tensions, coupled with the global economic slowdown, pushed investors to seek safety in gold, thereby raising its price.
Conversely, while Harris has not explicitly laid out her trade policies, analysts believe that she may adopt a softer stance compared to Trump. This is hypothesized based on the broader Democratic party’s approach towards international relations and trade policies. However, if the Harris administration does decide to tackle China’s market practices, trade tensions could further escalate, potentially impacting the gold price similarly to the Trump scenario.
The COVID-19 Pandemic and Gold Prices
The global pandemic has drastically affected the world economy and thereby, the gold market. Trump’s handling of the pandemic marked a significant discontinuity to economic activities, with significant economic fallout. This has boosted gold prices, as people rush to buy gold as a safe asset to hedge against economic uncertainties.
Contrarily, Harris has advocated for a more active government role in managing the crisis, pushing for more stimulus measures to support the recovery. If effectively implemented, these measures may renew investor confidence in the economy and reduce the need to hold safe haven assets like gold and thereby suppress its price.
The Impact of Central Bank Policies
The policies of the Federal Reserve under Trump, which have involved massive quantitative easing and record-low interest rates, have been supportive of gold
