Investing.com – JPMorgan strategists said in a note Thursday that gold could post significant gains if former President Donald Trump wins the upcoming U.S. election, as retail investors increasingly embrace the debasement trade by investing in these assets.
The strategy, which focuses on protection against possible currency devaluation, appears to be gaining popularity among retail investors in the run-up to the elections.
“Retail investors appear to be embracing the debasement trade in an even stronger way by purchasing bitcoin and gold ETFs,” the investment bank wrote.
JPMorgan explained that spot Bitcoin ETFs have experienced robust inflows, with more than $1.3 billion migrating into these funds in the past two days.
October alone saw inflows of $4.4 billion, making it the third largest month for net inflows into spot Bitcoin ETFs since their launch in January.
The bank adds that the increased interest extends to meme and AI-based tokens, whose market caps have recently outperformed.
In the gold market, JPMorgan says the trend is similar, with retail-driven inflows into gold ETFs continuing, although institutional investors appear more cautious and cautious about new futures positions.
According to JPMorgan, “there could be additional upside for bitcoin and gold prices in a Trump win scenario,” as this outcome could spur further retail investment in assets seen as a hedge against currency devaluation.
The note also highlights the current stance of the broader market, suggesting that credit markets are more likely to price in a Trump victory, unlike equity, interest rate or currency markets.
Still, if Trump wins, JPMorgan sees opportunities for short-covering and unwinding positions in various assets, which could improve liquidity and boost financial asset prices.
