The U.S. elections are about to begin, so I want to discuss a different perspective.
In simple terms, if Harris is elected, it will be bearish for gold prices; on other levels, it will basically continue the Biden administration's approach, but there will also be differences, which I will discuss later. Harris's election means 'foreseeable future' for the world, but Sino-U.S. relations will not significantly improve in the future.
However, if Trump is elected, it will be favorable for gold prices. Because Trump's policies are characterized by 'unpredictability', which means 'risk' for the international market.
As for Sino-U.S. relations, there are both good and bad aspects. For example, if Trump focuses on 'business', even if there are military and political conflicts between the two countries, they can be turned into 'business' in his hands. As the saying goes, money can solve problems that are not problems. So this is not necessarily a bad thing for us.
For instance, he previously mentioned that if we attack Taiwan, he would increase tariffs on Chinese goods to 200%. This actually reveals his character trait: he will handle issues with economic sanctions rather than with military confrontation.
A few weeks ago, he also promised that if he were elected, he would significantly lower the U.S. dollar interest rate. This would also be a major benefit for gold prices.
However, rationally speaking, the U.S. dollar interest rate is not something he can decide or command; it belongs to the independent function of the Federal Reserve. During Trump's previous term, he had conflicts with the Chairman of the Federal Reserve over this issue.
Earlier this year, I mentioned that when the situation of the U.S. election was basically determined, there would be basically no opportunities for the A-shares. The context of that statement was the competition between Trump and Biden for the next U.S. presidency, meaning that the initial judgment was that if Trump ran for the election, there would be no opportunities for the A-shares.
The current situation is a bit different: at the beginning of the year, the Chinese government had not introduced a lot of policies to stimulate a surge in the stock market; at that time, it also indicated a desire for the stock market to rise, but there were basically no policies in place.
And now, policies are being rolled out one after another, but the intensity is still being ramped up; the policy firepower has not dissipated, and the ammunition has not been exhausted. Moreover, there are still reserves (stabilization funds).
So now the U.S. elections will have a short-term impact on A-share trends, but it will definitely not be a long-term directional resistance.
The reason is that the current fiscal policy, monetary policy, and financial policy are a set of coordinated actions; any unilateral policy will not have a significant effect. Therefore, if the policies regarding the stock market have not been fully utilized (just starting to test fire) and are declared a failure, it will mean a complete failure of the aforementioned economic policies.
The U.S. presidential term is four years, and I am not saying that A-shares will not be affected in the coming four years. At least from now, the bull market in A-shares has never lasted this long. Moreover, from a military and political perspective, there may also be some changes in the future.
In the past few decades, U.S. presidents have been re-elected, and no one has been elected again after leaving office, while Trump is precisely an exception. In the past, presidents would shed the burden of political struggle during their second terms due to the lack of electoral pressure and strive to realize their personal political ambitions.
For example, during the second terms of Clinton, Bush, and Obama, Sino-U.S. relations were more harmonious than during their first terms, and this is definitely not a coincidence.
If Trump is elected this time, according to the 22nd Amendment of the U.S. Constitution, he will not be able to run for President of the United States again in four years. So during these four years, will businessman Trump focus more on business and his family interests?
But if Harris is elected, she will inevitably seek re-election four years later, so she must maintain 'political correctness', and further pressure on China is currently the greatest political correctness in the U.S. From this perspective, if Harris is elected, it will not only be a continuation of Biden's policies.