Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 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