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Election Day proved to Wall Street once again that trying to predict the stock market and the future of the U.S. economy is nothing more than a guessing game at times. When the dust had settled, Donald Trump stood victorious as the president-elect, which is the opposite of what essentially every poll had suggested leading up to Nov. 8. It also, temporarily, gave global most stock markets indigestion.

Physical gold, however, could be one of premier beneficiaries of a Trump presidency.

Gold could hit $2,000 Under Trump -- here's how

Physical gold is already up more than $210 per ounce year to date and has benefited in recent years from historically low lending rates. Physical gold is strongly influenced by the trade-off between interest-based asset yields, such as bank CDs, and the opportunity of generating bigger gains by owning gold, which has no yield. This opportunity cost of forgoing the guaranteed gains in interest-based assets has remained low and has positively influenced gold prices. In fact, most interest-based assets aren't earning more than the current inflation rate, which can lead to nominal gains but real money losses.

But when Trump takes office we're likely going to be looking at more than just low opportunity costs supporting physical gold's per ounce price. There are a mix of four fundamental and psychological factors that could, over Trump's four-year term, push gold to the $2,000-per-ounce mark.


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Uncertainty breeds a flight to safety

One of the bigger psychological catalysts for gold will be the uncertainty created by having Trump as president. As a reminder, Trump is a true outsider in that he becomes the only president in history to enter the Oval Office with no prior political or military background. This isn't to say Trump lacks the leadership skills to run the United States -- he has successfully run his real estate empire for decades -- but running a country and running a business are two very different animals.

At the heart of the uncertainties is whether Trump can achieve his projected GDP growth rate of 4%. Trump has promised to slash corporate income taxes from 35%, which is the third-highest in the world, to 15%, and introduce a much simpler, and lower, individual income tax schedule.  Putting more money into the pockets of Americans should boost the economy on paper since U.S. GDP is driven by consumption, but there are no guarantees that's how it'll play out. These questions, and the fact that some members of Trump's own party in Congress have butted heads with him, means uncertainty could drive investors to gold.

Growing national debt provides a fallback to gold

Building upon the previous point, our growing national debt could also play a role in pushing gold ever higher.

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Trump's tax plan involves reducing the individual income tax schedule to just three brackets -- 12%, 25%, and 33% -- from the current tax schedule of seven progressive brackets. With both houses of Congress firmly Republican, and the House of Representatives originally crafting the three-bracket proposal that Trump is now advocating, it's quite possible it, or some similar version of this plan, could become law.

However, various analyses of Trump's key tax proposals suggests that the annual federal deficit could expand, thus increasing the national debt at a faster pace than in previous years. According to estimates from the Tax Foundation, Trump's plan would lead to a 10-year reduction in revenue of $3 trillion. More debt means more money that has to be set aside to service interest payments and potentially less money for other projects to grow the U.S. economy.

Gold could be a prime beneficiary if the national debt becomes a hindrance to growth and forces Trump to rethink his tax plan. Weaker than expected GDP growth could also send investors scurrying for gold.

Infrastructure spending could be an ancillary benefit

Third, physical gold could see ancillary benefits from Trump's audacious infrastructure spending plan. Though both presidential candidates rightly recognized that America's infrastructure is aging and needs upgrades, Trump's proposed $1 trillion in spending over the next 10 years completely dwarfed the proposed $275 billion in spending over the next five years from Hillary Clinton. 

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The expectation that Trump could be wielding a loose wallet when it comes to infrastructure spending has most commodity-based stocks surging. The expected beneficiaries would include the steel, aluminum, and iron industries -- but gold could be a sneaky benefactor, too. Copper, which is one of the most commonly used metals in construction, is sometimes mined in conjunction with gold, with mining companies using gold as a credit to offset their copper mining costs, or vice versa. An increase in demand for copper could lead to a surge in gold production to offset the cost of copper mining at sites that have both metals.

History suggests it'll do well

The last factor is somewhat psychological. According to CNBC, gold tends to outperform when Republicans are in the White House. Keep in mind that history is no guarantee of future results, but it's not out of the question to assume that investors will position themselves in physical gold and gold stocks in advance of Trump taking office given this historical correlation.  

Could gold prove even more lustrous under Trump's presidency than it was under President's Bush or Obama? Only time will tell, but the initial signs suggest it's quite possible.