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US election uncertainty puts global markets on edge as Trump-Harris race remains tight

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By Colin Hay - 
2024 US presidential election equity market commodity price effects
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Global equity and commodity markets remain wary as the US election looks set to go down to the wire.

Polls continue to indicate the race is neck-and-neck between Donald Trump and Kamala Harris as to who will become the country’s 47th president.

The closeness of the race and uncertainties about how the final result will impact share markets and commodity prices have investors on tenterhooks.

Oil sector seems safe

It has been suggested that the oil industry might be the most significantly impacted by the election results—however, both parties have been strong supporters of the US’s booming petroleum sector.

When last in power, Donald Trump ensured that the oil sector – particularly onshore shale developers – was able to make the US largely independent of Middle East imports.

It is believed that Kamala Harris will follow in the steps of current president Joe Biden, under whom the US oil and gas sector has reached record levels in becoming a major petroleum exporter.

Ms Harris recently noted that the Biden administration had overseen “the largest increase in domestic oil production in history because of an approach that recognises that we cannot over-rely on foreign oil.”

Former president Trump has also criticised foreign oil, suggesting he would add 20% tariffs on all imports.

Critical mineral concerns

Reports indicate that US critical mineral miners and developers have been rushing to secure government-backed support for their projects in case Mr Trump is successful and decides to cut their funding in the future.

President Biden has been a strong supporter of the US critical minerals sector since taking office, highlighting concerns over China’s dominance in this area.

His government has awarded billions in conditional loans to dozens of companies planning to build facilities that process lithium and other minerals for electric vehicles (EVs).

Ms Harris has made it clear that she believes the US needs to create a strong and reliable supply chain to combat China’s world-leading position in manufacturing EVs and rare earth magnets.

She has also made renewable energy a major pillar of her policy.

Gold price reaction

Some analysts predict that should Ms Harris be elected, gold prices may pull back from the current record levels in the weeks following the outcome.

The report pointed to expectations of her presidency being less inflationary than Mr Trump’s, reducing the urgency for investors to use gold as an inflation hedge.

Gold surged to record levels during the previous Trump presidency and FXEmpire suggests that, if he wins again this week, prices are expected to climb due to increased inflationary pressures and heightened geopolitical uncertainty.