LONDON-listed gold, defence and infrastructure firms are in line for a “Trump bump” as the controversial president-elect prepares to enter the White House today.
The Share Centre said UK-listed stocks are likely to reap rewards from rising uncertainty, a falling Mexican peso, increased demand for military equipment and Trump’s pledge to improve infrastructure.
“Firstly, gold-related companies such as Fresnillo could benefit,” investment research analyst Ian Forrest said.
Gold prices have failed to return to pre-US election highs of $1,306.20 dollars (£1,059.54) per ounce, but controversial policies could send investors running back to safe haven assets like gold after Trump takes office. “With investors turning to the defensive nature of gold in uncertain times, others in the sector that could see an advantage include the likes of Randgold Resources and Polymetal International,” Forrest said.
A drop in the peso – prompted in part by fears over future relations between the US and Mexico – could boost Fresnillo shares by cutting the company’s cost base.
Forrest said: “All of the group’s operations are in Mexico, but its revenues are reported in dollars.
“Investors should note however, that a rise in US interest rates will act to dampen gold prices.”
Trump’s pledge to raise defence spending by $500 billion (£406 billion) to a trillion dollars (£811 billion) could also raise demand for the defence and armament sector.
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