Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Gold, Miners Under Trump

Gold, Miners Under Trump

Adam Hamilton

Donald Trump's epic underdog victory climaxing the US presidential race was radically unexpected by the great majority of the world. Equally if not more surprising was the subsequent days' market reaction. Stock markets, gold, and gold-mining stocks did exactly the opposite of what was universally forecast for a Trump win. This has left contrarian traders wondering how gold and gold stocks will likely fare under Trump.

Personally I'm thrilled and filled with hope for America with Donald Trump being our next president! We desperately needed someone to overthrow Washington's stranglehold on our lives. In both our monthly and weekly newsletters published before Trump's apparent upset, I took the contrarian stance explaining why Trump had far greater odds of winning than widely assumed. The stock markets predicted a Trump win too!

Still election night was a grueling nail-biter. As my wife and I watched the results dribble in, I marveled at the unfolding futures action. The way the electoral votes played out, Trump had to win Florida to have a shot at claiming the presidency. As Florida's vote counts rose, Trump and Clinton traded the narrow lead. The violent reactions in the futures markets as Trump's chances of winning Florida grew were incredible.

Everyone, mainstreamer and contrarian alike, expected stock markets to tank and gold to surge if Trump won the election. That was logical and reasonable given how the markets reacted after that late-October FBI revelation that a big new trove of Clinton e-mails were found to investigate. That drove the longest stock-market losing streak in 36 years, and gold surged in a major rally. Election-night futures mirrored this.

With expectations for a Clinton win overwhelming, as Trump pulled ahead in the electoral-vote count stock futures literally plummeted. S&P 500 (SPX) futures dropped more than 100 points, limit down at a 5% loss! Dow Jones Industrial Average futures collapsed as much as 800 points. All that extreme stock-market selling ignited a massive safe-haven gold bid, with this metal rocketing from a $1276 close to $1337!

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