Top Stories This Week: Gold Reacts to US Election, Experts Call for More Gains
Catch up and get informed with this week’s content highlights from Charlotte McLeod, our editorial director.
Election day has finally been and gone in the US, but as of this writing votes were still being counted and it was unclear who the next president will be.
Market watchers have been waiting to see how the event could influence the price of gold, and for most of the week the yellow metal stayed fairly close to the US$1,900 per ounce mark.
However, that all changed on Thursday (November 5), when gold rocketed up to US$1,950.
It’s difficult to know what the near term will bring, but for many experts the long term remains the same: No matter who ends up in the White House, gold’s path forward is up.
Speaking to INN, Frank Holmes of US Global Investors (NASDAQ:GROW) said the precious metal could “absolutely” hit US$2,000 again by the end of the year due to “unprecedented money printing.” As he’s discussed before, he has a longer-term target of US$4,000 for gold.
“I think that gold will continue to grow because of this unprecedented money printing. The (Modern Monetary Theory), also the Federal Reserve putting out lifelines to 15 different countries, helping them with US dollars — all of this money printing” — Frank Holmes, US Global Investors
David Morgan of the Morgan Report made a similar comment, emphasizing that the global economic and financial problems are so vast that gold will have to rise.
“(The election) might (impact gold) on a temporary basis as far as for a few weeks or months post-election one candidate or the other might cause a different reaction slightly, but the overall trend cannot be reversed regardless of which political party has the platform” — David Morgan, the Morgan Report
It’s also worth noting that amid all the election turmoil, the US Federal Reserve released a statement on Thursday after its latest policy meeting.
As was widely expected, the American central bank reiterated that it is “committed to using its full range of tools to support the US economy,” and maintained its 0 to 0.25 percent target for the federal funds rate; its inflation target is still 2 percent.
“The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term” — US Federal Reserve
With the election still top of mind, we asked a simple question in our Twitter poll this week — we wanted to know if our followers were surprised by gold’s post-election price activity. Most respondents said they were not surprised, with one person commenting that the only surprise is that gold hasn’t gone higher.
The US election was the major event in the cannabis space this week too. Five American states approved legalization measures. Mississippi legalized a medical market, while New Jersey, Arizona and Montana opened the doors to recreational use; South Dakota did both.
A report from New Frontier Data suggests that those five states could generate US$9 billion in revenue from 2022 to 2025, meaning that revenue from the legal US cannabis market could reach US$35.1 billion by 2025. What’s more, over 70 percent of Americans will now live in a legal cannabis market.
“With US$9 billion in new revenue from 2022-2025, should all five states ballot measures pass, New Frontier Data estimates that revenues from all legal U.S. markets will reach US$35.1 (billion) in 2025” — Giadha DeCarcer, New Frontier Data
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.