Why the U.S. Election Likely Won’t Derail Gold’s Rally—Regardless of Who Wins

The yearlong rally in the price of gold looks poised to continue in the months ahead—regardless of what happens in Tuesday’s election.

That’s the assessment of analysts at Goldman Sachs and ING who both predict gold will keep rising in the short-to-medium term, perhaps as high as $3,000 per troy ounce by the end of 2025. Gold futures (GC1!) were hovering close to $2,750 in recent trading Tuesday.

Expanding central bank purchases, declining interest rates, and heightened geopolitical tensions have created a “perfect storm for gold,” ING stated in a recent research note.

“These drivers are likely to continue regardless of who wins the presidential election,” ING said.

Confluence of Tailwinds

The price of gold has surged nearly 33% this year to repeated all-time highs, peaking last week at $2,805 per troy ounce. Long regarded as a safe-haven asset, the metal has benefited from investors’ uncertainty regarding the war in Ukraine, conflict in the Middle East, and the U.S. election.

Expectations the Federal Reserve would cut interest rates, which it did Sept. 18, also have contributed to gold’s rally. Declining interest rates offer less asset competition for gold, which does not produce annual income for investors. Investors expect the Fed to cut rates again Thursday.

Central banks seeking to diversify their foreign reserves have buoyed gold’s value. ING noted that central bank purchases last year reached the second-highest level in history, and that a World Gold Council Survey earlier this year found that 29% of central banks planned to increase gold reserves again this year.

Goldman Sachs said those factors, plus global policymakers’ concerns about the $35 trillion in U.S. debt, could push gold prices to $3,000 per troy ounce by the end of 2025.

Long-Term Policy Impacts

Goldman also predicts investment demand for gold exchange-traded funds (ETFs) will increase as interest rates fall. Those funds would have to buy physical gold to meet any rising demand, providing competition for central banks trying to add to their gold holdings.

Looking long term, however, ING stated that a victory for former President Trump in Tuesday’s election eventually could pressure the price of gold. Trump’s proposed tariffs and strict immigration policy “are inflationary in nature,” ING said, and could lead to tighter monetary policy from the Fed. However, resulting trade friction could “add to gold’s safe haven appeal.”

That friction likely wouldn’t exist if Vice President Kamala Harris wins the election, ING said. However, the Fed may maintain easier monetary policy amid her relatively less-inflationary policy proposals, providing support for the price of gold.