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Are Gold Bugs Donald Trump Supporters?

Economic News

According to a CNBC Poll, Trump supporters prefer gold to stocks as the best investment

Recently, CNBC host Steve Liesman remarked ‘Trump voters tend to be gold bugs’. This was not one of Mr. Liesman’s off the cuff remarks, but rather was based on a CNBC poll that asked what is the best investment – with the choices real estate, gold or stocks. Thirty-two percent of the polled group as a whole selected real estate, 21% selected gold and 19% selected stocks. When the polled group was divided between potential Hillary Clinton and Donald Trump voters, the results showed that thirty-three percent of Clinton voters selected real estate, 23% selected stocks and just 12% selected gold.

Thirty-two percent of Donald Trump voters selected real estate as the best investment, 31% selected gold and 13% selected stocks. Thirty one percent of Trump voters selected gold, behind real estate as the best investment.

Perhaps it would be a fair statement that Trump supporters tend to be gold bugs, if more than half of Trump supporters had selected gold over real estate and stocks. Less than a third, hardly qualifies for group gold bug status.

Are Gold Bugs Donald Trump Supporters?

While less than a third of Trump supporters selected gold as the best investment, probably more than three quarters of gold bugs would select gold as the best investment. Some Trump supporters may be gold bugs, but not all gold bugs are Trump supporters.

A quick review of Donald Trump’s statements and actions may lead the casual observer to think that Donald Trump himself is a gold bug.

These observers point to his statements last March in a television interview with Pittsburgh Action News:

“In some ways I like the gold standard and there is something very nice about the gold standard… We used to have a very solid country because it was based on a gold standard and we do not have that anymore…It would be very very hard to do at this point and one of the problems is we do not have the gold – other places have the gold.”

They also note Mr. Trump’s financial disclosure that he owned physical gold bullion worth $100,000 to $250,000.

Many gold bugs know that Donald Trump, however, is neither an investor in gold nor a promoter of the yellow metal. The gold that Mr. Trump disclosed owning is probably the gold he received as a security payment from a precious metal dealer tenant in one of his New York offices. The gold Trump took as a security deposit likely represents a publicity stunt rather than an endorsement of gold as an investment.

Last fall when Fox news asked Mr. Trump whether he considered investing in gold he said “Gold used to be something I used to like but I have not bought gold, no.”

Former Congressman Ron Paul, a gold bug himself, responded to the statement arguing that Donald Trump’s statement re gold was a buy signal (the price of gold has risen more than 25% since then). Gold bugs, like Mr. Paul prefer ‘honest money’ and do not trust ‘paper’ investments like stocks. They also favor smaller government. Many of Mr. Trump’s pronouncements, in contrast, involve plans to use big government to achieve his ends.

Which Candidate Will Gold Bugs Support?

Gold bugs may support Trump for President, not because he is a gold bug or endorses gold ownership, but because gold does well in times of uncertainty and his election and Presidency would most likely engender a fair amount of uncertainty. Indeed, the World Gold Council’s director of investment products told Business Insider in May “He’s very unclear in his policies, and uncertainty tends to make people say, ‘Maybe I should have something a little bit in gold.”

Just a guess, but far fewer than half of gold bugs will support Hillary Clinton.

Gold bugs are a small fraction of the electorate and unless the election is exceedingly close, will pay no role in determining the next President of the United States. Statements that gold bugs support Donald Trump are as irrelevant in helping to predict the outcome of the election as are (unconfirmed) statements that polygraph manufacturers and their investors and employees as a group support Hillary Clinton.

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This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.