The Gold and Silver markets seem to have priced in a Mitt Romney win even before the elections are held. The weakness in the Gold and Silver prices may continue somewhat into early next week, but with the US Presidential Elections finally happening could alter activity and reverse the movements for the rest of the week and coming months, Irrespective of the Outcome. No matter who wins on Tuesday, Bernanke’s term ends in 2014 only and he may step down at that time anyway. Now, if Romney does actually win, Gold may not show any further weakness and in fact may start rising in on the fact that the Fiscal Cliff (expiry of Bush tax cuts) and/or the debt ceiling issues may get into hot waters with the Fed and the new President not able to agree on most issues and their resolutions, triggering one of the most feared case of civil unrest. Even if they do manage to quit the political squabbling and achieve a degree of consensus, the scale of the fiscal problems in the US in terms of the national deficit and massive unfunded liabilities seem insurmountable. Once the markets begin to focus on that again, the dollar will come under pressure and that I think, bodes well for both Gold and Silver in the final two months of this year and into 2013.
But if in case Obama does win, Gold and Silver may actually rise vertically amid very swift sharp volatility. So finally it boils down to – Whoever be the Presidential winner, Gold will anyways win. Also the longer-term fundamentals of negative real interest rates, global stimulus and the debasing of fiat currencies will be supportive of Gold prices.