Top Stories This Week: Gold Futures Break US$2,800, 3 Experts Talk US Election Price Impact

The gold price was on the move once again this week, with December COMEX futures briefly passing US$2,800 per ounce on Wednesday (October 30), another new record for the yellow metal.

Gold had pulled back substantially by Friday (November 1), sitting at the US$2,735 level as of 12:00 p.m. PDT. The decline came despite a weak October US jobs report, which has boosted expectations for an interest rate cut next week.

With many undeniably influencing gold right now, arguably the most immediate is the US election.

As voting day approaches, the Investing News Network (INN) team has been asking experts whether the outcome matters for gold, and the responses have been interesting. Overall the consensus seems to be that while voting day turmoil may boost the yellow metal in the short term, larger forces are at play further ahead.

One point that was repeated many times is that neither Donald Trump nor Kamala Harris seems concerned about the growing level of debt in the US, which is an overarching driver for gold both now and in the future.

Here's how Chris Blasi of Neptune Global explained it:

Up until about eight years ago, maybe it was 10, you'd hear politicians talk about balancing the budget, getting the fiscal and financial house in order. No one even says it anymore — you'd look silly, right?

Gold is driven by the growth in debt and creation of money. They won't even give lip service to it anymore because it seems so outlandish. Now it's just about — the reality is debt will always grow, money will keep being created. That's why inflation is with us. So again, it just goes to in my opinion prove that those drivers that will continue to support the price of gold and continue to propel it are firmly in place, and not only is there no political will, but it's really past the point it could even be done. The economy could not survive with balanced budgets and reducing and paying down debt.

Craig Hemke of TFMetalsReport.com made a similar comment, saying that no matter which party ends up in power, the debt situation makes it key to own gold. This is what he said:

(The debt) is not going to change. It doesn't matter who's president, it doesn't matter which party is in charge of either side of the US Congress. This is going to continue.

And if we are in fact heading into a recession — which I have no doubt that we are, if it hasn't already begun — then your tax revenues are going to plummet, the spending is only going to increase. And that deficit and the total debt you're adding is only going to widen out on an annual basis.

So anyway, I have no idea who's going to win the election, but I think for people that are trying to plan for their financial security, to maintain their purchasing power, to see their way through this storm — whoever wins, you still want to keep buying your gold and buying your silver.

Joe Cavatoni of the World Gold Council took a different approach to the question, saying that investors should look six months down the line to see the election's impact on gold. Here are his comments:

Where the election will have impact (for gold) is on how policies will develop. That tends to show itself up six months or so post an election outcome when policies can be discussed, clarified and potentially start to be implemented. And that's why we think that six months into the election outcome is when you're going to start to see more of an effect on the gold price.

There might be, with the emotion that comes along with this election, there might be some increased levels of volatility, there may be some reaction, people looking to position around things. We might even see that globally in terms of some of the central bank behavior, the investors offshore who are looking at the US — looking at what's going to happen and how they're going to be impacted by the fiscal challenges that the US is facing. But overall you're going to need time to tell exactly how that'll play out as a policy — that'll lead to overall impact on the gold price.

The World Gold Council does make an interesting point in a recent report, noting that on average, US gold bar and coin demand seems to increase during Democratic presidencies, possibly because buyers may be Republican-leaning.

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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.