One of Jeremy Corbyn of Labour, or Boris Johnson of the Conservatives, will likely become the next Prime Minister.

Election day is here, and with it the Pound Sterling hit an eight-month high of $1.3228 against the US Dollar this morning as the latest polling points to a narrow Conservative majority. Polling is unpredictable however, and the Pound has since fallen back slightly to $1.316, while being at €1.182 against the Euro.

Survation, one of the main polling firms, put the gap at 11 points in favour of the Tories, as visible below:

Many other polling agencies are predicting a much narrower vote gap though. BMG have the support gap at 9 points, as does YouGov, while ICM and ComRes both have the election result at 6 and 5 percentage point margins respectively.

Anything below nine points would be a narrow Majority Government or a narrow Hung Parliament, but a lot depends on the turnout of young and newly registered voters – an unpredictable group which could drastically alter polls.

The four most likely scenarios are:

  • A majority Conservative government,
  • A coalition between the Conservatives and the DUP,
  • A coalition between the Conservatives and the Liberal Democrats, or
  • A Labour/SNP coalition (which may also be just a supply deal)

Despite the Pound’s gains, the price of gold has also risen today; up from £1,112.95 to £1,120.70 per ounce. This upward movement is a result of last night’s Federal Reserve meeting, which has boosted global Dollar-based prices.

The gold price per ounce in GBP today. Volatility is almost inevitable with the political uncertainty ahead of the election results, but market demand has still driven prices despite the Pound's strength.

In reality, not a lot happened at that meeting. Jerome Powell, Chairman of the fed, kept US interest rates the same. The impact of this is that the Fed want inflation to rise before they up the rates. Rising inflation will devalue the US Dollar, and so investors are showing renewed interest in gold – in what has been a spectacular year for the precious metal – as a way of acquiring an inflation hedge to prevent a loss of real value if they continue to hold the US Dollar as an asset in of itself.

The gold price per ounce in USD today. Gold demand has been boosted by the US Federal Reserve's intent to let inflation rise before raising rates again, which has resulted in nearly $20 per ounce gains for the precious metal.

Inflation is relatively slow in America, however, so for now it’s considered not too concerning, but the US finds itself in an odd position where it is yet to mirror the global slowdown to quite the same extent. Given the confidence at work in the States, if a downturn were to finally hit then the shock of it might be more exaggerated due to the loss of confidence. This would hurt investment, the Dollar, and likely boost the interest in safe havens like physical gold.