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Gold is getting cheaper due to the growth of the US stock market
November 12, 2018 5:23 pmVideo
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According to expert estimates, after the elections to the US parliament, the country’s stock market showed a significant increase. Following him, the German DAX index rose. As a result, the cost of gold was under pressure, but experts predict a change in the current situation.
Elections to the US parliament supported the US stock market. Investors believe that the political situation in the country will change for the better, since the Democrats have achieved a majority in the House of Representatives, and the Republicans have increased their influence in the US Senate.
The price of the yellow metal has decreased significantly against the background of the growth of the US stock market. According to analysts, this rise will not bring much profit to investors, as it will be short-term.
After the parliamentary elections in the US, many market participants believe that the policy in the country will change, but experts do not share this optimism. They are confident that Donald Trump will have to negotiate with Democrats when making important decisions, such as the state budget, infrastructure programs and reducing the tax burden. The head of the White House will be forced to compromise with representatives of the Democratic Party and on a number of other key issues. At the same time, analysts have no doubt that the US national debt will continue its active growth. Recall for the 2017-2018 fiscal year, which ended in September, it increased by $ 1.3 trillion.
Nevertheless, the Democrats will not be able to influence the trade policy of the head of the White House, experts believe. Experts believe that the US president will further worsen trade relations with China in the event of a possible threat to the US economy. In this situation, along with the global economy, the American stock market may suffer. According to experts, in the event of a stagnation of the world economy, the US economy will also be in danger.
According to analysts’ calculations, the growth of the US stock market after the parliamentary elections will be short-term, as will the decline in the price of gold. At the same time, the yellow metal will have to withstand the growth of the Fed rates and the strengthening of the US dollar, experts say.
The material has been provided by InstaForex Company – www.instaforex.com
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