All Eyes on Trump Harris Debate

The nation’s attention will be fixed on televisions and laptops this evening as Donald Trump and Kamala Harris participate in what may be the only publicized debate between the two presidential candidates. With polls showing them in a tight race, and their contrasting styles, the debate promises to be a lively event.

Each candidate presents a distinct fiscal policy. During his first term, Trump reduced federal taxes while increasing federal spending, leading to significant increases in both the federal budget deficit and national debt. Harris, on the other hand, proposes tax credits and incentives for low- and middle-class individuals, along with support for small businesses, a plan she calls the "Opportunity Economy."

Regardless of the debate's outcome, the next major event for the economy will likely be the Federal Open Market Committee’s meeting on September 18th, where a 25 basis point cut to U.S. interest rates is expected.

What does a rate cut mean for gold?

Historically, gold has gained as much as 9% over 2-3 quarters following the first cut in Fed easing cycles. 

Recent economic data supports this cut. The ADP employment report fell short of expectations, with a net gain of 99K jobs versus the expected 141K. Nonfarm payrolls also missed estimates at 142K, compared to the anticipated 160K.

In addition, the European Central Bank is expected to cut rates this week (25 bps), and the Bank of Canada has already implemented three cuts this year (75 bps).

Sources: MKS Pamp, Wikipedia, UBS

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