Gold prices saw a slight decline in Asian trade on Wednesday, influenced by a spike in the dollar and Treasury yields as early voting results indicated Donald Trump leading Kamala Harris in the 2024 presidential election.
The precious metal remained near recent record highs, with the election outcome still uncertain. Trump’s lead in key battleground states, such as North Carolina, contributed to the pressure on gold prices.
Gold futures fell 0.2% to $2,737.27 an ounce, while December futures dropped 0.1% to $2,746.10 an ounce by 23:34 ET (04:34 GMT).
Dollar Strength and Trump’s Lead Impact Gold Prices
The rally in the dollar and Treasury yields weighed on gold prices, with the greenback hitting a near four-month high.
Trump’s lead in electoral votes and key swing states like North Carolina, Arizona, Pennsylvania, Wisconsin, and Michigan added to the pressure on gold prices. Investors anticipate more inflationary policies under a Trump administration, which could keep interest rates elevated in the long run.
Despite Trump’s lead in certain states, the election outcome is still uncertain as votes are still being counted in several battleground states.
Additionally, other precious metals experienced declines on Wednesday, with silver down 1.2% to $995.65 an ounce, and platinum falling 1.1% to $32.430 an ounce.
Copper Prices Slide Amid Concerns Over Trump’s China Policies
Copper prices plummeted as the possibility of a Trump victory raised concerns about economic pressure on China, the largest copper importer globally.
Benchmark copper on the London Metal Exchange dropped 1.8% to $9,558.50 a ton, while December copper futures fell 2.3% to $4.3585 a pound.
Trump’s promises of imposing trade tariffs on China could escalate economic tensions between the two countries, particularly as China struggles with deflation and a weakening property market.
Investors are also keeping an eye on China’s National People’s Congress meeting for insights into Beijing’s plans for fiscal stimulus.
Analysis:
The fluctuation in gold, silver, platinum, and copper prices due to the early election results favoring Trump highlights the impact of political events on financial markets. Investors should closely monitor the election outcome and its potential implications on inflation, interest rates, and international trade policies. The uncertainty surrounding the election results could lead to continued volatility in the precious metals and industrial metals markets, affecting investment decisions and portfolio diversification strategies.