Gold prices could jump by as much as 10% over the next 12 months if Donald Trump wins the US presidential election, according to ETF Securities.
James Butterfill, head of research & investment strategy at the passive specialist, said the price of the precious metal is likely to rise as it is seen as a hedge against political uncertainty.
He said: "President Trump would bring more political unpredictability than any president for generations, particularly over the US Federal Reserve's leadership and monetary policy strategy."
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Conversely, he said bullion, currently priced at $1,275 per ounce, could lose up to 6% if Hillary Clinton becomes the first female US president.
Despite this, as both candidates' commitment to infrastructure plans are likely to increase the US deficit and increase inflation, gold prices are likely to move upwards in the long term regardless of who wins the presidency.
As a result, ETF Securities said it remains bullish on gold into mid-2017 due to continued political uncertainty in Europe, a negative interest-rate environment and over-stretched bond and equity markets.
"A rate hike in December will not derail the gold rally because interest rates are still going to be really low with real interest rates remaining negative," said Butterfill.
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"But there could be a dip in the gold market as rate hike expectations weigh on prices, with a rally resuming again in the New Year, with prices expected to rise another 10% to $1,440 by June 2017."
ETF Securities analysed 22 US elections since 1929, and came to its conclusion after finding that when there is a change of administration equity prices tend to fall by up to 6%, while the price of gold tends to rally by 10% within a year.
