President Joe Biden stepping down could be a ‘headwind for gold’ – London Business News | Londonlovesbusiness.com

Biden stepping down as the Democratic Party nominee could, at the margin, be seen as a headwind for gold, although few are trading that stance today, and the weaker USD is helping support through Asia today.

Kamala Harris hasn’t yet got the full nominee, and as Obama has shown a preference for, may still come down to an open contest, but I feel the prediction markets are right to have her as the big favourite to claim that position, and we’re already hearing of over $50m pledged by Dem donors, so the news flow seems to have revitalized the Dem’s prospects.

Harris has her sceptics, but I get the feeling that if she can forge a strong team around her – just as Obama did – and importantly convince Josh Shapiro to be her running mate, then we move from a situation where the election was Trump’s election to lose, amid a REP clean sweep, to one which could now prove to be a far tighter race.

If you were buying gold on the idea that the REPs could get the House and have smooth passage to blow out the deficit, then long gold positions may be called into question as we could again be looking at a split Congress.

Granted, there are still enough uncertainties to limit the downside in gold, and economic trends are still an incredibly important variable that will drive interest rate cut expectations, and by extension the gold price, but when we look at our checklist of the truly bullish medium-term kickers for gold, then Harris potentially lifting the Dem’s prospects into November does reduce reasons to own gold as a hedge against Trump/Vance’s hawkish foreign policy and massive deficit spending over the next 10 years.

Of course, much rides on how presidential Harris sounds when she does address the nation publicly, but she could offer choice, a factor many Americans have detailed they wanted – so a lot of ‘ifs’ but a presidential Harris could get this done for the Dem and reduce the number of reasons to own gold as a hedge against some of the policies a Trump/Vance ticket offers.