AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
Last Wednesday, gold prices broke through $2,800 per ounce, setting a new record high, but subsequently retreated significantly. Many factors influence the trend of gold prices, such as this week’s Federal Reserve interest rate decision and geopolitical instability, but the largest and most direct factor is undoubtedly the upcoming U.S. presidential election.
It can be said that this week is not only a super week for the U.S. stock market, but the gold market is also expected to experience significant volatility.
Current polls show that the support rates for Trump and Harris are very close. Although the uncertainty from the election can boost market risk aversion, gold may struggle to benefit due to technical retracement patterns. Meanwhile, if Trump wins the election, considering that his policies are generally seen as supporting a strong dollar, this will further suppress investors’ demand to buy gold for hedging purposes before the election results are announced.
However, for long-term investors, the U.S. election itself has more of a short-term impact on gold prices. Regardless of whether it is Trump or Harris, neither seems very concerned about the growing U.S. debt, which will be a major catalyst for a long bull market in gold.
Regarding U.S. high debt levels and the gold bull market, Chris Blasi from Neptune Global explains:
About eight or 10 years ago, politicians would still talk about balancing the budget, sorting out the fiscal and financial systems. But now, no one even mentions it anymore. If you do, you would look ridiculous and strange. Why? Because the price of gold is driven by the growth of debt and the creation of money, a fact that will continue into the future. Meanwhile, the economy can no longer bear balanced budgets and reducing debt. We are powerless to do anything about it, and there is no political will to change it.
As a result, the debt will continue to grow indefinitely, money printing will continue, inflation will persist, and gold prices will continue to be supported.
Craig Hemke from TFMetalsReport.com holds a similar view, stating that the debt situation makes owning gold crucial, regardless of which party is in power. He says:
No matter who is president or which party controls the U.S. Congress, the debt situation in the U.S. will not change. Also, in his view, the U.S. economy is heading towards a recession, tax revenues will plummet, but spending will only increase, and the deficit and total debt will continue to expand. Therefore, regardless of the election results, if you want to protect your financial security and purchasing power, you should continue to buy gold and silver.
However, Joe Cavatoni from the World Gold Council has a different perspective. In his view, the impact of the election results on the gold market will only truly manifest six months afterward, with key factors being the evolution of policies. In contrast, current emotions might cause some volatility, but only the implementation of final policies will have a decisive effect.
