Although the dollar showed recoveries after some initial slides following President Barack Obama’s re-election, gold posted two-week highs on Wednesday, rising to $1,729/ounce.
U.S. gold for December rose to $1,718.70 per ounce, Reuters reports. Most of this gain reflected investor confidence in gold since a second term for Obama means, in the short-term, continued economic stimulus and monetary easing, which has historically helped gold.
Had Romney won, and had he carried out his intent to dismiss Federal Reserve chairman Ben Bernanke and stop the monetary easing, gold might be faring much worse.
After the Fed undertook a third round of stimulus action back in September, gold nearly hit $1,800 per ounce before slipping down and holding as investors mulled over the possible outcomes of the presidential election.
Of course, it’s not all sunny since the “fiscal cliff”—roughly $600 billion in spending cuts and tax increases—is looming ahead. Much work lies ahead for the newly re-elected President and both parties.
The markets cannot rest, because in the weeks and months leading up to possible resolutions regarding the fiscal cliff, stability will be non-existent.
Over in India, purchase rates for gold has slowed as the festive season reaches its peak in November.
In 2011, India imported 967 tons, but next year it could crash to 550 tons, weighed down by high inflation rates and rising costs across the board.
Interestingly, there seems to be a general trend amongst those with significant gold holdings of shifting gold away from the unstable West to the relatively more stable East.
