What to Expect from Gold Prices If Romney Wins Election 2012

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With the presidential election less than one week away, market watchers are estimating what kind of impact a Mitt Romney win would have on the markets, including gold prices.

Gold is expected to continue its rise in 2013, reaching up to the $2,000 mark – or higher.

On Oct. 23, Deutsche Bank analysts called for gold to exceed $2,200 an ounce next year. This came in light of the stimulus measures by central banks.

They wrote in a research note via Commodity Online, "While we have targeted gold prices moving above $2,000/oz. since the beginning of 2011, we believe the Fed's open-ended program of QE announced last month increases our confidence that a surge in the gold price above this level is only a matter of time."

Yesterday (Wednesday), December gold futures closed at $1,719.10.

But if we fast-forward to January, even March 2013, if Romney wins Election 2012, would gold prices be able to continue their upward run?

Here's what a Romney win would do for the yellow metal.

Why a Romney Win Supports
Gold Prices

One thing Romney could implement is a gold standard commission, which he's been talking about in his platform.

This would have gold prices rising with the return of a connection between the U.S. dollar and gold. It is a little farfetched, but investors would jump on the precious metal as a safe investment and push prices higher.

There's also the potential change at the U.S. Federal Reserve. One area that Romney has been consistent on is his promise to replace Federal Reserve Chief Ben Bernanke. His term is not up until January 2014 and Romney could hand him walking papers if Bernanke doesn't leave on his own accord.

The Fed chief doesn't support a gold standard return, but in his absence, this idea could move forward.

Then there's that little U.S. debt problem Romney would face as president.

The nominee has said he has a plan to drastically cut spending, but once he gets into the office he will most likely realize this is a daunting task.

Cutting down the debt will have a negative effect on gold prices, but the likelihood of the U.S. doing so is slim, and would take decades. Realistically, the debt could continue rising under Romney at the helm, giving gold an even greater boost.

Also of note: Romney himself likes gold, reported ETF Daily News. The nominee marked on disclosures that he holds $250,000 to $500,000 in the yellow metal. Those would rise if he supported policies that led to higher gold prices.

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But what happens to gold prices after the election may not matter which political party wins on Nov. 6.

History has shown that gold prices fall when a U.S. president has increased economic stability, cut armed conflict, and avoided scandal, reported the International Business Times.

When Americans are either nervous or unhappy with their president, his approval ratings fall and money goes to gold. This happened under President Nixon and Carter tenures. Gold prices rose 267% and 322%, respectively.

We'll discover how America feels about the next U.S. president when votes are cast in five days.

Gold prices in New York today (Thursday) were trading just below $1,718 an ounce.

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Join the conversation. Click here to jump to comments…

  1. G Roberts | November 2, 2012

    Owning gold I would be happy if gold didn't go up as i could sell at this price and be very happy — unfortunately that is not likely to happen — whoever wins will be faced with exactly the same problems — money creation has been out of control and they will have to reign it in. Gold has never created a financial disaster for a nation — quite the contrary! History has shown that gold is often the solution. I think under Romney gold is likely to rise faster not slower, why? It will be fewer days for Romney to come to a conclusion what he wants to do — and he will do it. We need a doer not a talker — I think either way gold rises.

    • Robert DiLallo | November 2, 2012

      Sounds like a lot of double talk to me. Romney will take two years to even compose a plan.

  2. FrParlentAuxFr | November 4, 2012

    The biggest booster of Gold price if Romney is elected would be a war with Iran evidently. Very blatantly obvious.

  3. Lars Bourgois | November 4, 2012

    Good morning:
    Which goldstocks are on top of your list?
    I appreciate your thoughts:
    Merci!
    Lars

  4. Lars Bourgois | November 4, 2012

    I have shares in
    APRI (they have made contracts with 3 of the top pharmas
    in the world) to introduce a new and safe product for the 40%
    of women in the world still handicapped in their sexual
    life, a unique medication that has been approved by FDA.
    Start: early 2013 in the America"s and Germany.Current price.. $3.-

    SYT (on the verge of signing huge agricultural deal with Russia.

    ARNA (a Swiss manufacture site) is working round the clock
    to have adequate supplies of the weight tablet.
    ARNA is best bet for strong sales starting early 2013.

    I also plan to buy some AAPL next week on the rebound,

    Lars

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