Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Trump Impeached in the House! Is It Time for Gold Now?

Commodities / Gold & Silver 2019 Dec 28, 2019 - 06:55 PM GMT

By: Arkadiusz_Sieron

Commodities

Last week, the House voted to impeach Donald Trump. This is the third time in the U.S. history such an event has happened to the sitting President. What does it imply for the gold market?

Trump’s Impeachment, Explained

On Wednesday, the House of Representatives impeached Donald Trump. He became only the third U.S. president in history to be impeached, following Andrew Johnson in 1868 and Bill Clinton in 1998.

According to the Constitution, the President “shall be removed from Office on Impeachment for, a Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors”. Democrats created two articles of impeachments which refer to these other high crimes and misdemeanors. The first one accuses Trump of abusing his power by pressuring Ukraine to investigate Joe Biden, the former U.S. Vice President, in order to interfere in the 2020 presidential election.


The House of Representatives also accused Trump of obstruction of Congress by directing administration officials and agencies not to comply with lawful House subpoenas for testimony and documents related to impeachment. The abuse of power article was passed on a 230-197 vote and the obstruction article was passed by 229-198.

Trump denies any wrongdoing, calling the impeachment inquiry a “witch hunt”. Who is right? Well, we do not know. We are neither Trump’s supporters, nor Democrats’ fans - but let’s face it: the whole process is very political. Democrats are still furious after Hillary Clinton’s loss in 2016 and hate Trump. They hoped for several months that “Russiagate” would enable them to remove Trump from office, but it didn’t work out. So they are taking their chances once more, although the White House’s record of the call between Trump and Ukraine President is far from being a clear case for high crime, especially when you compare it to the Watergate scandal or Bill Clinton’s lying under oath about his sexual relationship with Monica Lewinsky.

However, there may be more to the story than politics and hatred of political parties. We mean here the hostility of the so-called “deep state” or “intelligence community” directed at Trump who is an outsider. Interestingly, even mainstream media started to notice that there is a real enmity between Trump and agencies such as the CIA and the FBI (to be clear, we do not claim that Trump is without sins, but that there is a kind of bias against Trump among the so-called establishment).

Anyway, impeachment does not imply removal from office. No president has been ever removed from office by impeachment and Trump is not likely to become the first one. That would require a two-thirds majority in the Republican-controlled Senate. So, at least 20 Republicans would have to join Democrats in voting against Trump to convict him. This is unlikely to happen.

Implications for Gold

What does the impeachments theater mean for the gold market then? The risk of impeachment should theoretically support the safe-haven assets such as gold. However, given the low odds of Trump being removed from office, the markets are little moved. The yellow metal also has shrugged off the news from Washington, DC, as the chart below shows.

Chart 1: Gold prices from December 16 to December 19, 2019

The price of gold has increased the following day, but it can hardly be called a rally. Having said this, the end of year is positive for the gold market, given the unfavorable environment. I mean here the fact that the phase one trade deal between the U.S. and China was signed, while the Conservative Party’s victory in the UK parliamentary elections cleared the path to Brexit in 2020. As two important headwinds for the global economy softened, one could reasonably expect that the price of gold would dive. After all, the risk appetite came back to the markets, bond yields increased, while equity markets reached record highs. And yet gold remained in a narrow trading range of $1,460 and $1,480. It seems that the yellow metal is preparing for a big move – now the question is in what direction (fundamentals suggest rather a decline, while the gold seasonal pattern favors an increase).

Chart 2: Gold True Seasonal Chart for Q4 2019

Depending whether you are a bull or a bear, we wish you to be content with the upcoming move!

We hope that you behaved well all the year and that Santa Claus will not impeach you… Merry Christmas!

If you enjoyed the above analysis, we invite you to check out our other services. We provide detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. If you’re not ready to subscribe yet and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!

Arkadiusz Sieron

Sunshine Profits‘ Market Overview Editor

Disclaimer

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Arkadiusz Sieron Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in