With the 2024 presidential election on the horizon, Vice President Kamala Harris is emerging as the likely Democratic candidate following the announcement that President Joe Biden would step aside and not seek reelection. As the election looms, it’s crucial to consider the potential economic and political impacts of a Harris presidency, particularly on the prices of precious metals like gold and silver. Given the current administration's trajectory, various factors could significantly drive up these prices under Harris’s leadership.

If the Past Is Any Indication …

Joe Biden’s endorsement of Kamala Harris as his successor has positioned her as the front-runner for the Democratic nomination. As Vice President, Harris has been closely aligned with Biden’s policies, suggesting a continuation of the current administration's economic and political strategies if she were to somehow win the next election. Harris’s candidacy is becoming increasingly likely, making it essential to analyze what her presidency could mean for the economy and the precious metals market.

Economic Woes

Under the Biden-Harris administration, the U.S. has experienced record-high inflation rates, a trend that could persist or even escalate if Harris wins the presidency. Inflation erodes the value of fiat currencies, leading investors to seek safe-haven assets like gold and silver. Historically, gold has performed well during inflationary periods. If inflation returns to escalated levels under Harris, as we saw during the Biden years, we can expect gold and silver prices to follow suit, as investors look to protect their wealth.

The stock market has been highly volatile in recent years, with sharp fluctuations that have left many investors wary. A Harris presidency could see continued or even increased market volatility, driven by policies that may not inspire confidence among conservative investors, including higher taxes on wealthy investors and corporations. This uncertainty can lead to a surge in demand for gold and silver, as these metals are seen as stable investments during tumultuous times. Historical market crashes have often led to increased precious metal investments, a trend likely to continue under Harris, given that the markets are showing signs that a correction could be on the horizon.  

Social Chaos and International Tensions

The U.S. is currently experiencing significant political division and social unrest. These issues could persist or even escalate under a Harris administration. Political infighting and social chaos create an environment of uncertainty, driving investors towards safe-haven assets. Gold and silver, being tangible and universally recognized stores of value, become particularly attractive during such times. The current state of political unrest serves as a stark reminder of the potential for continued instability.

Tensions with countries like China and Russia are already high and could worsen under a Harris administration. Harris’s approach to foreign policy could lead to further geopolitical instability, prompting investors to seek refuge in precious metals. Geopolitical risks historically drive demand for gold and silver, as these assets are viewed as reliable stores of value in uncertain times. Meanwhile, the war in Gaza rages on, with no clear path to resolution. All this tension around the globe could increase the demand for tangible assets, including gold, and it’s clear that many nations are already filling their central banks with the yellow metal as fast as they can.

Weakening of the U.S. Dollar

Under the current administration, the U.S. dollar has shown signs of weakening. This trend might continue or even accelerate if Harris implements policies that increase government spending and debt. A weaker dollar typically leads to higher gold and silver prices, as these metals become more affordable for foreign investors and more attractive as a hedge against currency depreciation. Meanwhile, the Federal Reserve’s monetary policies under a Harris administration are likely to remain accommodative, while pressing hard to keep interest rates in check. Low interest rates reduce the opportunity cost of holding non-yielding assets like gold and silver, making them more attractive investments. Historical data shows a strong correlation between low interest rates and rising precious metal prices.

A Kamala Harris presidency could have significant implications for the prices of gold and silver. High inflation rates, stock market volatility, political infighting, social chaos, international conflicts, a weakening U.S. dollar, and accommodative Federal Reserve policies all point towards an environment where precious metals are likely to shine. For investors, this means that incorporating gold and silver into a diversified investment portfolio could offer stability and growth potential in uncertain times.

While the prospect of a Harris presidency may raise concerns about the future of the U.S. economy, it also highlights the timeless value of precious metals as safe-haven assets. By staying informed about political developments and their potential economic impacts, investors can make strategic decisions to protect and grow their wealth in the years ahead.

But what happens to the price of gold if Trump wins a return to the White House? Find out here! >>

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