Gold dumped for riskier options as Trump elected president
LONDON (November 6) Gold (XAU/USD) trades down by a percentage point in the $2,710s on Wednesday due to the US Dollar (USD) strengthening after Republican nominee Donal Trump was named the winner of the US presidential election. Trump won with 277 electoral college votes over Vice President Kamala Harris' 224, according to the Associated Press. USD is gaining due to the market view that Donald Trump’s economic agenda and tariffs will strengthen the US Dollar. This, in turn, is negative for Gold since it is mainly priced and traded in USD.
Gold is also losing ground due to capital rotating out of Gold and other safe-havens into riskier assets such as Bitcoin (BTC) and equities.
Trump’s claims that he can end the conflicts in the Middle East and Ukraine, though seemingly exaggerated (“I will have that war (Ukraine-Russia) settled in one day – 24hrs,” Trump once said), could also be reducing safe-haven flows into Gold.
Gold losses out as Trump trade fully materializes
Gold loses out to the US Dollar, Bitcoin and US stock index futures as markets celebrate the expected victory of Donald Trump in the US presidential election.
The US Dollar Index (DXY) rose over 1.3% to a peak of 105.32 on Wednesday as it became clear Trump was almost certain of winning.
US stock futures were also up during Wednesday's European session, with the S&P 500 futures contract up 2.2% at 5,909 in pre-market trading and the Dow 30 futures contract up over 1.3% to 42,770, as markets rejoiced in anticipation of Trump’s likely lower tax agenda.
Likewise, Bitcoin rose to a new all-time high of $75,407 due to the looser regulatory environment for crypto promised by Trump.
The pivot back into the US Dollar, Bitcoin and stocks, however, saw capital flow out of bonds and commodities, with US Treasuries, Gold, Oil, Silver and Copper all falling.
FXStreet
