The upcoming US presidential election and capital flight out of China are two major topics that spring to mind when fund managers and stockbrokers consider the road ahead for gold. 

The consensus view among bosses and senior figures from Argonaut, Petra Commodities Asia, Regal Funds Management, and Noah's Rule, at the MiningNews Select conference in Sydney, Australia, was that a win by Joe Biden would see gold prices go up, and a win by Donald Trump would see them go up even further. 

The bookies give Trump the shortest odds

From a perspective outside of the US, it can seem as though a second Trump term is unfathomable, but it is a very real possibility. 

In fact, bookmakers have him as the favourite. Ladbrokes, for example, has Trump at 1.91/1, which compares to Biden's odds at 2.60/1. Bet365 has even shorter odds for Trump, at 1.83/1. 

"I have just come back from North America myself, and I can tell you, there are a lot of people who think Trump will win. And that's not a popular narrative in this country, and in many places," Regal Funds portfolio manager James Morrison said. 

‘A hand grenade rolling around the floor'

The nutshell equation is: gold loves turmoil, and turmoil loves Trump. 

"Trump introduces that hand grenade rolling around on the floor; no one knows when it's going to go off. But it's going to be very destabilising," Morrison said. 

Argonaut's managing director Benjamin Clifford noted "wildcard" Trump has also spoken about bringing back the gold standard while adding that it's not the stockbroking firm's base case on probabilities, but it shows how wide open things are in terms of where the gold price could go. 

The 2016 election

Petra Commodities founder and CEO Alberto Migliucci saw things differently. 

"I'll take a slightly contrarian view," he said. 

He said in the lead-up to the 2016 election, he, too, took the view that a Trump victory would be bullish for gold prices and see them "go crazy". 

"But it actually went down. The share market just melted. And that caught everyone off-guard, including myself," he said. 

"So, I actually think if Trump wins, gold will go down."

‘Gold will outperform almost any other asset class'

More broadly, and more importantly, Noah's Rule managing director Sean Russo said, "Gold will outperform almost any other asset class" in the year ahead. 

"I think that almost anything you sell for new money to buy gold, at some point in the future, you'll be able to buy more of it back – with the possible exception of really well-run gold mining companies," he said. 

‘A bunch of gold bars around the axle of a vehicle'

Regal's Morrison said the unexplained rally in the gold price could be down to capital flight out of China amid a looming crunch driven by the fall in China's property market. 

Sharing a story from a recent discussion with a "China expert", Morrison said people were trying to get money out of China any way they can. 

"In January, a car leaving China was spotted by the customs people who thought the tyres looked a bit flat. Upon further investigation, they found a whole bunch of gold bars had been put around the axle of this vehicle, which weighed it down."

Buy property in China, get a gold sweetener chucked in 

Petra's Migliucci shared a few anecdotes of his own about the movement of gold in Asia, derived by his 20 years living in Hong Kong, Singapore, and other parts of Asia. 

"In the Shanghai property market, there are actually property developers trying to entice people to buy property, which is in the doldrums, by offering gold bars as a sweetener," he said. 

"You go to a supermarket in Singapore and there's an ATM for just gold. So, that's the mentality.

"In Vietnam, you can actually buy a house with gold. There's a very different mindset," he said. 

Central banks buy gold, not equities

Meanwhile, he put the fact that there's a "difference between a high gold price now that some of the equities guys are lagging" down to central banks buying gold, whereas they don't buy equity. 

"The gold price is so high that ultimately the equity guys should follow it up, especially if you're producing," he said. 

Booze, ciggies, and gold 

Noah Rule's Russo said the lag in equities also comes down to generalist investors not liking to invest in gold or mining. 

"It's too easy to make money in other markets," he said. 

Lowell Resources Funds Management chief investment officer John Forwood said in the keynote address at the conference that this is particularly true among North American investors. 

"Mining as a general rule for investors in the US is that it's a ‘sin stock'."

"Alcohol, tobacco, and mining are all sort of grouped together as bad things that are unethical to invest in.

"And with gold mining, in particular, there's a small school of thought – which I definitely don't agree with – that gold is a useless asset and mining it creates carbon emissions and it should be kept in the ground. 

"So, perhaps that's part of the reason why you're seeing a little bit of a lack of interest in gold equities," Forwood said.