Donald Trump pulled off an upset victory Tuesday for the US Presidency, overcoming Hillary Clinton, who despite recent polls showed that the former Senator had a sizeable lead heading into the election. Yet by the end of the count, it was Trump who captured the required 270+ electoral college votes to win. And as most major world markets were pricing in an outcome in line with the polls, chaos erupted within the financial markets as votes began to show Trump securing a probable victory.
If there is one thing markets hate it is uncertainty. And as Trump will be the first US President without prior government experience to step into office, the outcome is certainly giving markets plenty to worry about.
By midnight of the election day, the US dollar had fallen 2.5% against a basket of world currencies, the Dow Jones Industrial Average was showing a loss of over 600 points for the morning open, and gold had spiked $65 to above $1,335. This was an impulsive fear reaction across the board.
Yet by the end of the trading day, much of the initial fear had abated…with the dollar recouping its losses, the Dow Index finishing in positive territory, and gold giving back all of its gains.
This volatility is certainly extreme, but what is a precious metals investor to make of these wild gyrations? Was this a one-time blip for gold, or is there something more in the works?