The effect of election results on Gold price in coming months and years
Sam Adelton
Nov. 12, 2006

The Democrats are back in Congress. The mandate was against corruption, Iraq war as the center of America established itself as the main political force over the extreme right and extreme left. What does that mean for the Gold prices in the coming months and years?

Gold price has gone up heavily in the last four years. The reason is mainly the unrestraint spending by the Government. Democrats and Republicans understand, they cannot increase the tax on the common people. The Government will have to shrink. Transparency and audit trail in awarding Government contracts; entitlements and general spending will be main theme for the next two years.

The politicians were reminded they work for the common people of America and not special interests like in countries that is plagued with dictatorship. They were also reminded that people are watching and no one is fool to get brainwashed and misguided for ever.

The Gold market bull trends depend on just one thing. It is the relative strength compared to the currency, which in this case in US Dollar. It is really an international currency that defies the manipulations of the central bank. It is the de facto market currency that shows the inherent weakness of currencies – in other words real inflation in the economies.

The budget deficit is what really helped the Gold market. The Gold market will closely watch the spending patterns of the Congress and the Administration. If the oversight works, the spending is curtailed, transparency is brought back, corruption is eliminated, budget deficit is reduced not by expectations of the increased revenue but real cut in spending, the Gold market will go down sharply.

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