By Mr. Prithviraj Kothari, MD, RSBL
As US elections head for the home stretch with both the leading candidates heading for a photo finish, financial markets across asset classes are jittery. Higher volatility is visible across all markets, be it oil, gold, bonds, currency or equities.
A prelude to how markets are expected to behave was given by world market on reports of Donald Trump closing the gap on Hillary Clinton in the presidential race. While most investors expected Hillary Clinton to win the elections, recent disclosures by Federal Bureau of Investigation (FBI) on Clinton’s e-mail controversy has helped Trump regain lost ground.
We shall take a look at how various asset classes are expected to behave if Hillary Clinton or Donald Trump moves to the White House.
Gold markets thrive
on uncertainty, it usually does before US elections. But this time
around market experts feel uncertainty will continue and help gold prices if Trump wins. A Trump win
is likely to bring in uncertainty till he comes clean on his policies. Equities are expected to drop down 10-15 percent . Rupee depreciation is expected and gold may rise up to 40-50 $
A Hillary win will leave markets unshaken. Since more are in favour of a Hillary win, her victory is not expected to make the markets volatile.
Irrespective of who wins studies show that as the dust settles, the
year following the elections could be bad for gold prices.
