What Does Electing Blue or Red mean for Gold?

This week Goldman Sachs announced that a “blue wave” in which democrats win the House, White House, and Senate would result in greater economic growth, while other experts argued it would be the “most dangerous outcome.”

According to CNBC, Goldman Sachs’ chief economist Jan Hatzius based his findings on democrats’ plans for more stimulus and spending in the near and long term.

Specifically, Hatzius cited democrats’ favored COVID-19 relief stimulus package estimated at $2.5 trillion in 2021, followed by an additional $2 trillion in infrastructure and climate-related spending and another major bill that would add benefits to the Affordable Care Act and include spending on child care and education.

Although former Vice President Biden plans to increase taxes to offset a portion of this spending, Hatzius said the growth and stimulus would “outweigh the negative effects of tax increases.”

Meanwhile, Strategas’ chairman and CEO Jason Trennert told CNBC this week that a blue sweep would be the “most dangerous” outcome for the economy, saying, “The plans to increase taxes across the board – income, dividends, capital gains, corporate taxes – I think this is an inopportune time to do it.”

Trennert submitted that the market would favor a Biden win and split congress, which would result in increased spending without increased taxation. He also noted that a Trump win and split congress would be a bullish sign for the markets, signaling that the lockdowns would end sooner and would also result in some increased spending without increased taxation.

As with many of the other issues and uncertainties we have faced in 2020, the experts are split. Which outcome will best support the markets? Which outcome will contribute less to the overwhelming national deficit? Which outcome will help the average American continue to pay their bills and avoid greater personal debt? Which outcome will be best for your portfolio?

The upcoming election will decide much about our nation’s future and perhaps even more so our individual financial futures. Is your portfolio ready to withstand the fallout of any of these candidates’ promises – whether they keep them or abandon them?

Physical gold and silver have stood firm as wealth insurance through the changing powers, uncertainties, and crises of the past, and they will continue to do the same. In many ways they are the closest thing to a “certainty” that exists. Both metals have performed well throughout 2020 – a year characterized by tumult in just about every way – and they are poised to continue to rise regardless of the election outcome.

Call us today to learn more about the likely paths for gold and silver in any election outcome. We can take an in-depth look with you and your clients to find a position in physical gold and silver that best suits your portfolios and financial goals in the face of an uncertain future.