The firm sees Trump as slightly more bullish for the yellow metal, but expects big upside regardless. From Bloomberg:
Although they deem a Donald Trump victory more supportive for the price of the metal than a win by Hillary Clinton, the bank’s Chief Precious Metals Analyst James Steel says it’ll enjoy at least a 8 percent jump whoever wins the race.
An 8% jump from current levels would equate to gold prices of $1,407 per ounce, a level unseen since 2013.
HSBC’s reason for the bullish view? More U.S.-focused governmental policies:
Both candidates have espoused trade policies that could stimulate demand, with gold offering a potential “protection against protectionism,” he says. Even the relatively more internationalist Democratic candidate has argued for the renegotiation of longstanding free-trade agreements. That’s positive for gold — even if “not on the scale of Mr Trump’s agenda.”
The firm noted that gold could rise as high as $1,500 per ounce if Trump prevails next week, which would mark a massive 15% rally from gold’s current level around $1,300.
That’s because gold has long been seen as a hedge against economic and political uncertainty, both of which are expected to be highly pervasive amid a Trump presidency.
The SPDR Gold Trust ETF (NYSE:GLD) rose $1.54 (+1.25%) to $124.27 per share in Wednesday morning trading. Year-to-date, the largest exchange traded fund tied to the spot price of gold bullion has gained 22.47%.