Donald Trump shocked investors by winning the 2016 presidential election, and we've just revealed our newest gold price prediction following the news.
You see, Money Morning Resource Specialist Peter Krauth expected volatility in the markets, no matter who won. That's what we're seeing today.
But according to Krauth, Trump winning the election is not the only driving force for gold prices in 2016 and 2017.
Before we get to the other major gold price catalyst, here's why the price of gold today has climbed 2.2% after the Trump victory...
Why the Price of Gold Is Climbing Today After Trump Win
According to an ABC/Washington Post poll from Nov. 7 poll, 60% of the likely voters surveyed had an "unfavorable" view of Hillary Clinton.
While most voters didn't like her, the markets were in favor of a Clinton presidency. That's because her policies weren't expected to cause volatility or uncertainty.
Trump, in comparison, is viewed as a wild card.
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President Trump simplifying the tax system and supporting the energy sector could fuel economic growth. But investors are also concerned over how he plans to pay for the wall between the United States and Mexico.
There's also concern over how Trump's relationships with foreign countries could impact trade. With so much uncertainty, investors are looking for the safest places to put their money.
And right now, investing in gold is safe.
Gold is now trading at $1,307.30 an ounce and has climbed 4.19% over the last month. But Krauth believes there is even more room for gold prices to climb.
Here's how high Krauth sees the value of gold climbing in his bold gold price prediction after the election...
Our New 2016 Gold Price Prediction
Now that the 2016 election is over, Krauth believes that the December FOMC meeting will have a positive impact on gold prices.
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Right now, the markets believe the Fed will raise interest rates in December. According to CME Group's FedWatch Tool, investors believe there's a 71.5% chance the Fed raises rates.
That number is lower than the 76.3% chance before Trump's presidency, but it's still a high probability.
A Fed interest rate hike will create even more uncertainty, and Krauth says that uncertainty is a "boon for gold prices."
After the Fed raised interest rates in December 2015, the Dow Jones Industrial Average dropped 10% in six weeks.
And there could be even more volatility this December if the Fed does raise rates. A rate hike will be very bullish for gold prices.
Before 2017, Krauth projects gold prices could reach $1,400 an ounce in his year-end price target.
From today's price of $1,307.30, that's a potential profit of 7%.
The Bottom Line: The stock market is volatile today, but our gold price prediction is right on track for the end of 2016. After the markets accept a Trump presidency, gold prices could start to fall. But because of the uncertainty over whether or not the Fed will raise interest rates, gold prices could continue to climb to $1,400 by the end of 2016.
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