FINSUM + Magnifi: Why the Biden Administration May Be Bad for Gold

(January 2021)

 

Gold has been hurting recently, with prices currently around $1,800 after some strong gains over the course of 2020. The big question is where gold is headed now that the vaccine is rolling out and a new administration is coming in. The bottom line is that the Biden administration may pose some difficulties for gold. The reason why is that Biden is planning a multi-trillion Dollar stimulus package that could boost inflation. Gold generally falls as rates rise because of its zero yields. Therefore, the administration’s plans for ongoing stimulus—which will boost the cash flowing into the economy—are a net negative for the metal.

(New York)


FINSUM + Magnifi: More stimulus means higher yields and less market volatility, all of which look bearish for gold.



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