It’s now been a few days since the US casted their ballots to elect a president, but there’s still no clear winner. Whatever happens next, it looks like we’re in it for the long haul.
Meanwhile, gold prices have edged higher and are close to reaching US$1950 an ounce. That’s close to a 2.5% increase since before the election.
As a result, many of the ASX gold mining stocks are doing quite well today.
At time of writing, Evolution Mining Ltd [ASX:EVN] is up by 5.80%, St Barbara Ltd [ASX:SBM] shares shot up 7.55%, Saracen Minerals Holdings Ltd [ASX:SAR] increased by 6.56% and Northern Star Resources Ltd [ASX:NST] is up by 6.54%.
On this point, one way to get exposure to rising gold prices is through gold stocks. But picking winners isn’t easy. Check out Greg Canavan’s free guide on ‘How to Pick Winning Gold Stocks’.
All this uncertainty is good for gold
Gold is trading higher on the back of the US dollar weakening. The US Dollar Index, which measures the US dollar against a basket of major currencies, dropped close to 2% since before the election.
Gold is also rising on the promise of more stimulus. In the middle of all the election mayhem, Federal Reserve’s Chairman Jerome Powell released a few comments.
Courtesy of CBS News:
‘“Further support is likely to be needed to avoid further spread of the virus and help individuals who, with the expiration of the CARES Act payments, are seeing their savings dwindle.” Powell was referring to the Coronavirus Aid, Relief, and Economic Security Act, passed in March, which increased unemployment benefits, provided loans for small businesses and sent $1,200 relief checks to most Americans.
‘“The path of the economy will depend significantly on the course of the virus,” the Federal Open Market Committee, the central bank’s rate-setting panel, said in the statement. “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.”’
It doesn’t matter who wins
Whether it’s Biden or Trump, with the virus surging it’s very likely there’s more stimulus on the way.
All this economic uncertainty, the pandemic and more stimulus are quite a mix that could keep gold rising. After all, gold is a safe haven too.