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Kuwait bullion: gold is the biggest winner during the US presidential election, Kuwait bullion: gold is the biggest winner during the US presidential election
The Kuwait Sabeeq Group said in its report: “Historically, the economy’s growth increases by 0.3% during the election year compared to other years, but the election race towards the White House this year comes different and is accompanied by many factors that made this not possible, as the Corona pandemic struck. The economy shrinks strongly during the first and second quarters of this year, and the economy shrank by 0.5% during the first quarter, while the largest contraction was during the second quarter, reaching 31.4%, affected by closures and adherence to social divergence, and job losses are all factors that made the economy’s growth numbers plummet Unprecedented.
Kuwait Saboyat expected that the economy will return to growth in the third quarter by 30%, and the actual result of growth will be announced days before the election date on the third of November 2020, while it is expected that the economy will contract B days before the election date on the third of November 2020, While expectations are that the economy will contract by 4% during the last quarter of this year.
Saboyat Al-Kuwait confirmed that the demand for safe havens of assets is linked to increased uncertainty in the markets. The American elections this year are expected to be accompanied by many factors that will lead to an increase in uncertainty, such as delaying the announcement of the results, and this will contribute to expectations of an increase in the number of Americans who They will vote by mail for fears of the spread of the Coronavirus.
She explained that there is an expectation that contested elections will be over and we may witness a lot of controversy over the results. These expectations raise investor fears of high volatility in the markets, which will increase the demand for hedging and warming up in safe havens, noting that the yellow metal has reached a historic high in August. From this year, our gold has risen above $ 2,070 an ounce and is recording annual gains of 26%.
She explained that the increases were related to the economic repercussions of the spread of the Corona pandemic during the first and second seasons of the year, and then a price correction process occurred for the yellow metal during the month of September coinciding with the declines of American stocks, after investors resorted to covering the short positions due to the rapid declines that occurred in the stock markets during the month of September, Then gold rose again above the level of $ 1,900 an ounce after the announcement of the US President’s infection with the Corona virus.
Kuwait Bullion stated in its report that people buy gold for several reasons, the low price may be one of the reasons, and also for the purpose of hedging against risks and socially in seasons and occasions. Demand for the yellow metal takes many forms, some of which are investment and some are consumer.
Kuwait Bullion expected that the yellow metal will move during the remainder of the year through the impact of the US elections on the financial markets. These scenarios will depend on the risk situation in the markets and the amount of uncertainty in the financial markets.
First scenario Prices return to touching the historical level of the yellow metal at 2,075. This scenario will happen in the event of an increase in the risks of the US presidential elections and the intensity of the disputes.
The second scenario Gold fell to the level of 1,7890. This scenario is achieved in the event that one of the candidates wins the American presidential elections, a comfortable victory by a large margin.
Kuwait Bullion said that technically, the 1,825 area is a strong technical area, from which gold rose at the end of July and continued to rise and scored its record level, also it is the 61.8 correction level according to the Fibonacci algorithm, from which the technical level takes its strength and traders’ expectations of a bounce from it if the correction continues.
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