Gold News

Obama win may offer gold buying opportunity at low level

A leading global investment bank has hinted today (November 3rd) that the likely victory of Barack Obama in the US presidential elections could provide an opportunity for investing in gold.

Most opinion polls put Senator Obama ahead of Republican rival John McCain, with one even claiming he is leading in six out of eight key states ahead of tomorrow's first day of voting.

Now Barclays Capital has explained to Reuters that a Democrat win would probably herald a short-term boost in the dollar as the new incumbent rides a wave of optimism.

However, as the reality of the global financial crisis continues, Senator Obama will undoubtedly face problems and the dollar will level out or slump in the coming months.

This, of course, would mean that there could be a potential bottom in gold prices in the very near future for those looking to come in at a low level for their investment in the yellow metal.

According to the news provider, a Barclays Capital research note read: "Our (forex) team believes that an Obama victory is likely to be short-term US dollar positive, as it would allow Washington to respond more proactively on crisis management."

The view that prices will suffer in the short-term was echoed by JP Morgan analyst Michael Jansen, who told Reuters that the surplus accumulation in the market will "weigh on prices".

Even if gold price increases do not materialise rapidly, the ongoing nature of the financial crisis and the spectre of recession should mean that anyone buying gold will have a sound long-term investment.

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