Yesterday, Asian markets collapsed as it became clear Trump was winning. Japan’s Nikkei 225 index fell 5.36%. The Aussie market closed down 1.93%.
Everyone has their opinion on Trump vs Clinton. But the Trump-Clinton election will have a major market impact also, which investors need to watch closely.
Even a stopped clock is always right twice each day, they say. And if each day we predict a stock market crash, one day (perhaps) we’ll be right.
Persistent low rates have not caused inflation, but they have caused asset bubbles, which threaten to pop and unleash a financial panic on their own — independent of tight financial conditions.
It may not seem important, but where the gold price goes next could provide a major clue on the health (or otherwise) of the world’s economy.
Gold is volatile for one reason. Investors remain infatuated with the next US Federal Reserve interest rate decision. The Fed next meets in November. Investors don’t believe the Fed will do anything at that meeting.
The weak US economy and the weak US dollar policy resulting from the Shanghai Accord meant that the Fed was unable to raise interest rates.
In today’s video update Kris looks at rising US interest rates and the knock-on effect it’s having on stock markets…
Goodfriend’s focus was to promote ‘unencumbered’ negative interest rate policy, which means getting rid of things standing in your way.
The question is, with gold having now pulled back 3.78% from the July high, what’s next? Should you lock in your gains, or have a punt?