Who is better for gold and silver? Obama or Romney?
The markets seem like they’re waiting on the outcome of an event… is there an important election today or something?
The precious metals are fairly muted as they, along with the rest of the world, await for the results from the US Presidential election. Some traders are postulating that with US equities and the precious metals up on the day, the markets have assumed that Obama will win (the rational being that an Obama victory would signal a greater likelihood of quantitative easing while a Romney victory would mean a more concerted attempt to control spending and curtail liquidity).
If Obama wins, gold should spike in the aftermath and the medium to long term picture remains bullish. If Romney wins, there may be a short term sell off but the longer term view still emphasizes a bullish story for gold (maybe just slightly less bullish than with Obama). The overall point though is that the macro issues of colossal debt and inevitable inflationary pressure will not be easily solved by either candidate in the years to come. As such, the precious metals should continue to be an attractive investment. After collapsing through $1,700 on Friday, gold has formed a nice base ahead of the 100 day moving average at $1,670. This level and the 200 day moving average at $1,662.25 are relatively significant support zones where bids will be waiting. Romney or Obama, long term the picture remains extremely bullish!
November 1, 2012
With East coast businesses and traders slowly returning to the market in the wake of Hurricane Sandy, the precious metals were able to catch bids yesterday on increased volume. Even in the face of end of month producer selling, the precious metals rose as some bullish fervour returned to the market. Gold has consolidated nicely above $1,700 and after forming a base at this area, it will be looking to move towards the 50 day moving average of $1,735. Silver is also attempting to move north from its recent range and will be eyeing a close above $32.40 (a previous triple top) before attracting further interest.
Overnight, Chinese equities received a boost from encouraging PMI readings suggesting signs of economic recovery. Chinese manufacturing PMI went from 49.8 to 50.2 in October. This was the first time it has been over 50 since July. Equities rallied 2% off this news and the upbeat sentiment has continued into the European and US sessions. The Dow is currently up nearly 150 points (also aided by US Unemployment Claims coming in better than expected at 363k versus the forecasted figure of 371k).
Keep an eye out tomorrow for the US Unemployment Rate due out at 8:30 AM EST.
