Editors' pick: Originally published Nov. 2.
No matter who wins the U.S. Presidential election, gold is going to come out on top, according to HSBC.
Republican candidate Donald Trump would be best for the gold bulls, but his Democratic rival, Hillary Clinton, would also provide at least an 8% boost to bullion prices, with both candidates touting protectionist policies that will spur buying as a hedge against an economic downturn, HSBC's chief precious metals analyst James Steel argued.
Gold has already rallied on the uncertainty of the current election, gaining along with Trump's recent poll numbers, to pass $1,300 an once Tuesday, its highest point since Oct. 4.
The precious metal could rise beyond $1,500 an ounce if Trump wins, according to HSBC. A Clinton victory would likely bump the metal's price up toward $1,400, though a Democratic sweep of Congress, clearing the way for a boost in fiscal spending could drive the price higher still.
Republican candidates are typically viewed as bearish for gold due to their fiscal conservatism and tendency to be more supportive of business and trade. Yet in this year's unusual election cycle, that assumption has been turned on its head, according to HSBC.
"Although Donald Trump is the Republican presidential nominee, we view his policies as considerably more gold-bullish than Mrs. Clinton's," Steel wrote. "In addition to his avowed protectionist stance, Mr. Trump has also presented a firmly populist platform. As a perceived 'safe haven' and flight-to-quality asset, the demand for gold is often stimulated by the same factors that fan protectionist and populist sentiment."
HSBC noted that Trump's fiscal policies were also likely to support gold prices. Chief U.S. Economist Kevin Logan noted that cuts to federal tax and planned increases in spending on the military and infrastructure would likely push the federal deficit higher by $2.6 trillion to $3.9 trillion over 10 years.
"Higher deficit spending and budget deficits are associated with higher gold prices," the bank noted.