Trump’s Election Drives Gold Prices Down, Could Push Investors Toward 2017 Stock Diversification

Is Donald Trump driving down the price of gold? At least one expert seems to think Trump getting elected and the spiraling price of gold are linked. Interestingly, instead of the public learning about how Trump is having an influence on gold prices, top headlines center around a lucky gold thief in NYC that picked up a pot of gold worth $1.6 million that was sitting on the street.

Sadly, this gold thief may not be as lucky as the Telegraph reported he was on November 30. On December 1, it was reported that the pot of gold find in NYC at $1.6 million depreciated by as much as 8 percent in November.

If the thief had found the gold in October, the pot of gold flakes would have been 8 percent more valuable, and the $1.6 million would have actually been worth $1,728,000.

Despite this, is the depreciation of gold in November solely because of Trump’s election?

According to a December 1 report from Reuters, the price of gold has been declining since February, but it dropped another 8 percent in November. About the sudden drop in gold during that month, an economics analyst explains that Trump getting elected was linked.

Interior of Trump Towers, New York City
Just take one of the golden escalators up to the penthouse. [Image credit: Ullstein Bild/Getty Images]

Reuters prefaced the quote from the economics analyst by explaining that the price of gold was “hurt by a jump in the dollar and Treasury yields after Donald Trump’s surprise election to the U.S. presidency led to speculation that his commitment to infrastructure spending would spur growth and inflation.”

Reuters also quoted Daniel Smith, an Oxford Economics analyst, stating the following about gold and Trump.

“Gold has effectively gone into a downward spiral, triggered by the Trump election and the dollar strength that has come through from that. We see that dollar strength persisting over the next year, so there are a lot of reasons to think gold is going to struggle.”

Nevertheless, there may be a turning point in the impact of Trump on the price of gold because “The Federal Reserve is widely expected to lift interest rates for only the second time in a decade at its [December 13 to 14] meeting.”

Even if the price of gold becomes lower, it is likely that gold investing will still be popular because it has a strong history of staying commercially popular. According to Gold Coins of the World: From Ancient Times to the Present, by Arthur L. Friedberg and Ira S. Friedberg, whether it is religious burial remains for a king or a randomly found artifact, when things are unearthed from the past, archaeologists almost always find a piece of gold — usually in the form of jewelry or coins.

For this reason, it should be no surprise to see that major publications like Fortune are still encouraging investors to buy gold stocks in 2017. In fact, on December 1, the introduction of their gold investing article states, “these stocks should thrive no matter how Donald Trump and OPEC impact gold and oil prices.”

Joe Foster, portfolio manager of the VanEck International Investors Gold Fund, gave his picks for nontraditional investments such as gold and gold-mining stocks. Since he predicts Trump will preside over an America in a recession, Joe Foster recommended “small positions in a gold miner or two.” Joe Foster also touted stocks like Newmont Mining and B2Gold.

President-elect Donald Trump steps outside the clubhouse to greet Jonathan Gray
President-elect Donald Trump at Bedminstar, NJ [Image by Drew Angerer/Getty Images]

For gold investors that find some mines conflict with their personal ethics, there are ecologically minded gold investments such as stocks that support “green gold mines.” For example, PRI reported in 2012 that Northern Columbia miners that pan for gold in a stream are using balsa leaf extract instead of mercury to refine gold from tailings and consider their process “organic gold mining.”

Gold investors can also invest in high-tech gold refining or recycling that has suddenly become very green and low-tech. In the past, refining gold from electronic devices was toxic and involved cyanide.

Now, thanks to a research breakthrough in 2013 from Northwestern University, nanotechnology and cornstarch are harvesting gold from old electronics.

Already, companies like Cohen Brothers in Ohio and ecoATM in San Diego are harvesting old electronics to extract the gold from them, according to a 2014 report from Journal-News.

Green gold harvesting investors might get a boost in the next years because it was recently announced that the gold medals for the 2020 Tokyo Olympics will be recycled from old smartphones, according to FOX News.

[Featured Image by Alex Livesey/Getty Images]