New Delhi: The victory of Donald Trump in the United States presidential election is poised to alter the global energy landscape, in anticipation of his anticipated policies, as per a report by Angel One Wealth.
Donald Trump, renowned for his advocacy of domestic energy independence, has consistently championed the increase in oil and natural gas production within the United States. This policy is likely to exert downward pressure on global crude oil prices.
According to the analysis by Angel One Wealth, there is a possibility of crude oil prices experiencing a correction soon, as Trump is expected to maintain control over prices by elevating domestic production. His focus on self-sufficiency in energy is anticipated to diminish the United States' reliance on foreign oil sources, thereby affecting global supply and pricing dynamics.
The report states, "Donald Trump is expected to exert tight control over crude prices, as he has consistently supported the expansion of domestic energy production."
Furthermore, the report highlights that Trump's preference for a non-interventionist stance in international conflicts could stabilize oil prices by facilitating a quicker resolution of these conflicts.
However, potential instability could emerge should Trump implement new sanctions against Iran, a move that could disrupt oil supplies from the region.
In summary, the report suggests that Trump's influence on the energy sector could lead to a decrease in crude oil prices, although external factors will also play a significant role.
Nonetheless, at the time of writing this article, Brent Crude prices have surged by 0.65 percent to reach 75.41/ barrel.
In addition to the energy sector, Trump's policies are projected to be expansionary, characterized by increased government spending. This could lead to an expansion of the U.S. fiscal deficit and, consequently, an increase in the national debt.
The rise in U.S. debt is anticipated to have a positive effect on gold prices, as heightened levels of debt and potential inflationary pressures encourage investors to seek safe-haven assets. Gold is currently experiencing high demand in China, further supporting its value.
While there are counterarguments against gold, such as reduced volatility in equity markets, a stronger U.S. dollar, and a potential "risk-on" rally in equities, the report notes that gold's fundamentals remain robust, rendering it an appealing asset in the current climate.
It also reaffirms its positive outlook on silver, which, like gold, is poised to benefit from economic uncertainty and an increased demand for safe-haven investments.
However, it is important to note that gold prices, on the other hand, experienced a decline to Rs 78,710 / 10gm, a day before closing at Rs 80,500.
