In a note to clients, JP Morgan advised staying defensive, with the Equities backdrop looking “Problematic”. The banks analysts closed the note by reissuing their call to “Sell Stocks and Buy Gold”.
While the fundamental picture looks increasingly volatile and uncertain for Equities – on the flipside the fundamental backdrop continues to remain ultra-bullish for Gold due an ever-growing number of macro and geopolitical tailwinds that are currently unfolding.
These include; persistent geopolitical tensions, strong central bank purchases, growing demand from China as a hedge against economic instability in the world’s second-largest economy, along with the high-stakes U.S presidential election.
Gold Set for ‘New Super Bull’ Run as Traders Could Bet on Trump Victory
Traders are already starting to price in a Donald Trump victory in November – which could spur a “new super bull” in Gold off the back of a multitude of factors including – tariffs of 60% or higher on foreign goods, a surge in infrastructure spending and tighter sanctions on Iranian oil – all of which could reignite global inflation.
During Donald Trump’s previous presidency – Gold price rose substantially, soaring from $1,200 an ounce when he took office in January 2017 to over $1,900 an ounce in his final month, which was January 2021.
Whichever way you look at it, one thing is clear. The possibility of Donald Trump’s return to the White House will also inevitably mark the return of the famous “Trump Trade”.
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