Gold slumps as Trump’s decisive win drives up dollar, yields

Spot gold fell 2.8% to $2 668.40 an ounce as of 9:17 a.m. in New York.

Gold slumped with bond yields and the dollar pushing higher after a decisive election victory by Republican presidential candidate Donald Trump ended the uncertainty that has been hanging over US politics.

Bullion tumbled as much as 3.2% as Trump’s win rippled through global markets, with Treasury yields jumping and the dollar strengthening the most since 2022. A surge in the currency makes bullion pricier for many buyers.

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Trump clinched victory after taking key battleground states, while Republicans also gained control of the Senate. This definitive outcome has prompted some traders to book profit after seeking safety in the precious metal last month amid the possibility of a contested election. Gold had gained 4.2% or nearly $110 in October, with money managers’ bullish bets near a four-year high.

The selloff is “a combination of the fact that positioning is rather heavy and stronger yields and the US dollar,” said Nicky Shiels, head of metals strategy at Geneva-based MKS PAMP SA. “The removal of some US political uncertainty given the decisive and quick win by Trump also ensures some geopolitical premium is unwound.”

Analysts still see a bullish impact in the long run, fueled by US inflationary pressures and currency weakness in China in the face of possible trade tariffs.

“While a stronger US dollar and higher yields in a Trump win may be headwinds for gold, this will be balanced with potential safe-haven demand in the event of any trade tensions,” said Jun Rong Yeap, a market strategist with IG Asia Pte.

Analysts have said Trump’s policies are likely to bloat the federal deficit — and the resulting inflationary risk could boost gold’s appeal as a hedge against rising prices.

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The metal has surged almost 30% this year to repeated record highs fueled by heightened geopolitical and economic risks, driving purchases by central banks and consumers alike. The rally intensified in recent months as the Federal Reserve pivoted to interest-rate cuts and the US election loomed.

Spot gold fell 2.8% to $2 668.40 an ounce as of 9:17 a.m. in New York. The Bloomberg Dollar Spot Index rose 1.6%. Silver, platinum and palladium all retreated.

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