Investors view gold as the most important safe haven in a period characterized by high levels of risk to great levels, and at the same time there is no specific destination for the yellow metal amid the state of uncertainty that prevails in the world.
In light of the current situation, Kuwait Bullion Company for Trading Precious Metals drew two scenarios for the future of gold until the end of the year, based on several political, economic and other natural factors.
According to the company’s report, the most important factor determining the gold movement is the US presidential election scheduled for November 3, amid fierce competition between the Republican candidate, President Donald Trump, and the Democratic candidate, Joe Biden.
The exciting thing about the elections this time is that it is taking place in a foggy climate due to the emerging Corona virus pandemic, and the associated infection with Trump himself and then his full recovery will directly affect gold prices.
Sabbik Al-Kuwait indicated that the market is severely affected by the ambiguity surrounding the future of the elections, during which voting will be allowed by mail as a precaution due to the pandemic, and which raises concerns about the delay in the results and the constitutional controversy around them.
Another factor is the uncertainty over the approval of a massive additional stimulus package of $ 2.2 trillion to support the US economy.
While economic growth affects the future of gold, especially in light of the sharp fluctuations in the US economy due to the pandemic, after it contracted by 31.4% in the second quarter of 2020, growth is expected to return by 30% in the third quarter and then shrink gloriously by 4% In the last semester of the year.
Based on these factors, the first scenario for gold’s movement until the end of 2020 is for prices to return to touching the historical level of the yellow metal at 2075 dollars an ounce, in the event that the risks of the US presidential elections and the unity of disputes increase.
At that time, investment and consumer demand for the precious metal will rise, with improved economic indicators, in conjunction with an improvement in demand in both India and China.
While the second scenario is crystallized in the decline of gold to the level of 1789 dollars an ounce, and its occurrence is linked to the victory of one candidate in the US elections by a large margin from the other, which means a lower level of risks.
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