Recently, I was invited to speak on a Singaporean radio talk-show to discuss the outlook and potential opportunities in the market. Besides covering the possible decline in gold and silver prices in August, a focal investment into high-tech stocks will be the top opportunity in 2020 to 2021.
On the radio host asked me on the outlook of US dollar exchange and how would the dollar trend be affected by the outcome of the upcoming November election which would see Donald Trump and Joe Biden bidding for presidency. I briefly made some comments and forecast on this topic.
In my opinion, Trump would continue his policy on ‘Making America Great Again’ during the upcoming election. Of course, this will depend on the Americans to judge after seeing the progress in the country for past four years. If Trump wins, we predict the dollar will weaken gradually in order to facilitate exports to China for sealing the phase-one deal.
On the other hand, Biden will reassure lowering the debt budget and issue more social security benefits if he wins. This will eventually devalue the dollar in order to implement this easing policy.
Hence, it will be no surprise if the dollar strengthens in November and December for the sake of winning the public confidence among Americans. After the election, the movement into new year will probably see a new wave of selling in the dollar in order to stimulate the recession from the Coronavirus Disease 2019 (Covid-19) crisis.
The gold and silver would also likely recover in September and October but weaken towards the year-end again. The third wave and longest streak of bullish trend might surface only in the early 1Q of next year.
When I was asked again on my projection on gold prices, I laid down a disclaimer before giving my final comment. We project the yellow metal prices to reach US$2,400 per ounce before mid-year 2021 and eventually rise to US$3,500 per ounce in 2022.
I hope this will give you an idea on where to place your investments in precious metal now. Trade well.
Dar Wong is a financial professional in Singapore for more than 30 years experiences. The expression is solely his own. He can be reached at [email protected]