Will gold decrease or increase when US politics is tense?
The assassination not only increased Mr. Trump's chances of victory but also increased the Republican Party's chances of a sweep. If Republicans gain control of the White House and both houses of Congress, they could enact tax cuts that would increase the budget deficit.
That's how things work. When one party takes control, it's either Republicans cutting taxes or Democrats spending more. Both cases resulted in higher deficits, while a divided Congress barely passed anything.
When the budget deficit increases, bonds will be sold off due to concerns about increased supply and accelerating inflation. The Fed will therefore have to maintain interest rates at higher levels for longer.
How does this affect the market? Higher yields from US government bonds will make gold less attractive. Stock investors love low interest rates, and higher interest rates can make the market less attractive.
The biggest beneficiary is probably the USD. The USD benefits from both higher yields and a safe-haven environment. Political violence is bad news, and in tough times, the world's reserve currency is the winner.
Overall, the assassination of former President Donald Trump could cause gold and stocks to decline, while boosting the USD. Polls and ongoing information will determine how long this story lasts and how it impacts the markets.
That's how things work. When one party takes control, it's either Republicans cutting taxes or Democrats spending more. Both cases resulted in higher deficits, while a divided Congress barely passed anything.
When the budget deficit increases, bonds will be sold off due to concerns about increased supply and accelerating inflation. The Fed will therefore have to maintain interest rates at higher levels for longer.
How does this affect the market? Higher yields from US government bonds will make gold less attractive. Stock investors love low interest rates, and higher interest rates can make the market less attractive.
The biggest beneficiary is probably the USD. The USD benefits from both higher yields and a safe-haven environment. Political violence is bad news, and in tough times, the world's reserve currency is the winner.
Overall, the assassination of former President Donald Trump could cause gold and stocks to decline, while boosting the USD. Polls and ongoing information will determine how long this story lasts and how it impacts the markets.
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