President-elect Donald Trump
On November 8, 2016, after a contentious battle, Donald Trump was elected as the 45th President of the United States. Trump, the republican candidate, overtook the democratic nominee, Hillary Clinton; news that has shocked and stunned, as all the pre-election data proved incorrect. A Trump win was a result few strategists, investors and economists took seriously in their preparation for the election, and the outcome triggered initial widespread risk aversion before regaining composure.
Gold was poised to be an attractive offer this morning, as the Dow Jones industrial average, S&P 500, and Nasdaq all felt the effects of the Trump election ahead of opening. The news garnered a reaction of fear and uncertainty, which is where gold thrives as investors seek safer avenues. Earlier in the night, the losses were dramatic, with Dow futures plunging more than 900 points. U.S. stock futures took a 5% tumble, triggering a limit that halted further drops. After a tumultuous night, the uncertainty and fear over a Trump presidency have appeared to be tempered. The market has shown resilience, and in early trading today the numbers have shifted again. The S&P 500, which was down 5%, overnight, recovered and is up 23 points (1.10%). The Nasdaq Composite, which had slipped 0.2%, gained 51 points (1%). The Dow Jones Industrial showed quick recovery, and has gained 205 points, or 1.12%.
Wednesday’s early hours, gold bullion surged as much as 4.8 percent to $1,337.38 an ounce. Accordingly, gold is experiencing an incredibly heavy trading day. Gold trading reached record levels, with the Shanghai Gold Exchange’s main gold contract rising 5-fold from Tuesday, setting a new record equal to 145 tonnes of bullion. London-based gold dealer, Sharps Pixley Ltd, reported running out of bars and coins due to the buying surges. As with the other markets, though, things have begun to settle. Gold has been making its way back down, with prices closer to the $1273.50 open.
Gold prices react to political and economic factors, acting as a barometer for the market. Savvy investors will look to building a more sound and diverse portfolio, which will heavily factor in gold prices. Previously, we discussed how election uncertainty, and a new President could affect the price of gold, and our next post will examine how a future with Trump’s policies could shape gold prices, and what to expect from the markets
Related Blog Posts:
Unpredictable Outcomes: the 2016 elections and the Price of Gold
Gold Hits High as Uncertainty Hits Low
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