Stocks, gold and crypto: What’s next after the US election?
Democrats and Republicans have touted different policies, some of which could affect Thailand
Visit Ongpipattanakul, chief executive officer and director of Trinity Watthana, says that if the Republican Party wins both the US presidency and Congress, it will benefit US stocks but negatively impact emerging markets, including Thailand.
In the scenario where Donald Trump wins the presidency but Congress is split between Republicans and Democrats, Thai stocks would likely move sideways.
The direction will also depend on the Federal Reserve's pace of interest-rate cuts. If Trump wins, the Fed might reduce rates more slowly or less significantly, which could lead to a resurgence in inflation. Conversely, if the Democrats win, the Fed might lower rates to around 3%, keeping inflation in check.
If Trump wins, US stocks could rise, as he is expected to reduce corporate taxes below the current 21%. In contrast, a Democrat win would likely see the tax rate increase from 21% to 29%, which raises concerns over import tariffs.
Trump has announced plans to increase tariffs on Chinese imports from 10% to 60%, with an additional 10% hike on imports from other US trading partners.
As for gold, several factors remain to be watched. Recently, declining interest rates have boosted gold prices. However, if inflation rises, gold’s performance may weaken. Increased geopolitical tensions, on the other hand, would likely support gold prices.
Chayanon Rakkanjanan, co-founder and CEO of Finnomena, a mutual-fund brokerage, noted that in the past 24 hours, Democratic Party presidential candidate Kamala Harris's poll numbers have rebounded to a near tie with Trump. With the race tightening, conducting accurate polling has become challenging.
Harris has not addressed cryptocurrency policy during the campaign, while Trump has pledged strong support to make the US the world’s largest crypto-mining hub. A Trump victory would benefit the crypto sector. Bitcoin has shown volatility, climbing to US$72,200 and then dropping to $68,000, seemingly tracking Harris’s poll movements as well.
As for gold, it is likely to benefit regardless of who wins, given ongoing trade wars, tech conflicts, and geopolitical tensions. Although Trump is not seen by some as a strong supporter of Israel, which could leave that country somewhat isolated, there is concern that the Democrats might escalate military action.
Weerapong Chutipat, CEO of Real Estate Exponential Co Ltd (RealX), a digital investment token issuer, commented that if Harris is elected US president, global change will be minimal, particularly in the cryptocurrency space. Gary Gensler, the current chairman of the US Securities and Exchange Commission, is expected to remain, and his stance has generally not favoured crypto.
Trump’s policies, on the other hand, aim to concentrate all crypto mining in the US. If he wins, the crypto market could see strong momentum. Trump has also advocated for increased ICOs (initial coin offerings) in the US, with Texas poised to become a Bitcoin mining hub, supported by relatively low electricity costs to boost mining popularity.
"As for gold, its value is expected to rise, as the US dollar is likely to weaken over the next three to five years, prompting countries, especially China and India, to accumulate gold reserves," Weerapong said.
“India in particular has stored substantial gold reserves with the Bank of England. Additionally, since the Russia-Ukraine conflict, the dollar has been weaponised, which could have a negative impact on its value."
