|By Arabian Post Staff|The gold price breached US$1,300/oz in the wake of Donald Trump’s victory, up from US$1,275/oz before the vote counting began. Gold price has increased, outperforming other assets, including other safe havens.
The market is expeting short term volatility in the wake of the election result as it signals a major political and economic change. Gold trading volumes have risen sharply in Asia. Western markets, which have just opened, are forecast to see a continuation of the trend.
Gold trading volumes rose sharply in Asia. However, anecdotal evidence from bullion banks worldwide suggest that institutional and hedge fund investors have yet to come in, signalling a potentially sharper increase in demand as European and US markets open.
The intense political uncertainty that advanced economies now face, combined with the unknown aftermath of years of unconventional monetary policies (quantitative easing, zero and now negative interest rates) will make gold particularly valuable to investors in the coming years.
Gold is the only de-facto currency that cannot be debased by printing more of it, and the only one that does not carry political risk. There is a reason why gold has outperformed every major currency throughout history.