Donald Trump Vs Kamala Harris: Whose Win In US Election 2024 Could Trigger Fresh Upside In Gold?

Gold Prices In India Outlook: The US election is the biggest event of November, which is going to set a tone for the world's largest economy for the next four years. Two candidates Donald Trump and Kamla Harris are in a neck-to-neck rivalry for the power. The election comes at a time when there are geopolitical tensions in two regions Middle East and Russia-Ukraine, and amidst the lowering interest rates cycle coupled with inflation which is still above the Fed's target. All of these factors have strengthened gold globally in 2024. Will the US election also trigger a fresh upside, but whose win matters?

Currently, spot gold is near its all-time high of $2,758.54 an ounce, and US gold futures with December expiry is closer to $2,758.54 an ounce. These new highs were recorded earlier this week owing to volatility in the equity market, rising tensions in the Middle East war, and volatile treasury yields ahead of the US election.

Following international trends, Indian gold and silver prices have also given solid returns in 2024 so far. MCX gold has touched an all-time high of Rs 78,919 per 10 grams, while silver closed a fresh high of Rs 1,00,289 per kg.

YTD, MCX gold is up nearly 21% from the current price but surged by nearly 22% from its all-time high. Also, silver prices have climbed by 22% from the current price, but skyrocketed more than 26% from its all-time high, as per MCX data.

So whose win will matter the most for gold? Kamala or Trump?

According to Ventura Securities, the overall stance of fiscal policy might be similar under Trump and Harris, but the two offer starkly contrasting visions in terms of taxes and spending.

Ventura's note added, let's ponder on the higher chances of a victory by Republican presidential candidate Donald Trump at next month's election (5th Nov'24). Markets betting has the rising odds of Trump winning the US election and with his generous corporate tax cuts proposal to reduce tax to 15% from 21% rates would result in widening the US FED deficit.

That being said, Ventura believes this could trigger strengthening of Gold.

It said, Trump has pledged to fund tax cuts with revenues from import tariffs. Trump's policies present the largest upside risks to inflation, due to the impact of tariffs on import prices, which could force the Fed to keep interest rates higher than it would do otherwise.

Ventura also pointed out that if policies head in this direction, it could lead to weaker growth, higher inflation, and somewhat tighter Fed policy relative to the status quo policy mix. His desire for a depreciation of the dollar to help American exporters, is also being reiterated.

However, Ventura also noted that a second Trump term would bring uncertainty relating to higher tariffs on Chinese goods and a global retreat from free trade.

And a Harris presidency would be a less of a threat to China's near-term outlook, it added.

Currently, the economic cycle in the US is on the downswing: inflation and growth are softening, and the FOMC will most likely start easing policy this autumn, as per Ventura.

The United States election 2024 is going to take place on November 5, 2024.

During this presidential election year, the president and vice president will be elected. In addition, all 435 seats in the United States House of Representatives and 34 of the 100 seats in the United States Senate will be contested to determine the membership of the 119th United States Congress. Thirteen state and territorial governorships and numerous other state and local elections will also be contested, as per Wikipedia.