Gold and silver are going to finish what was truly an eventful week posting poor results. Naturally, the main topic of discussion heading into this week and still today was the US presidential election. Unless you have been living under a rock you know full well that Donald Trump surprised everyone and laid claim to victory. Now, markets are reacting and investors are trying to make a sense of what a Donald Trump presidency might mean for markets overall, and for them specifically.
In addition to this, rate hike talk has also been called back into question as the month of December and the rate hikes expected to accompany it are inching ever nearer. With this new president-elect, however, there remains doubts with regard to whether the Fed will pull the trigger or not.
What An Eventful Tuesday It Was
There is no denying that this past year and a half has brought out some of the craziest electoral headlines in history. Despite all the craziness, as this past Tuesday approached there already seemed to have been a foregone conclusion drawn. This conclusion was that Hillary Clinton would easily win the election and would assume the role of President of the United States—also making her the first woman to assume that role.
After polls were opened for a few hours and results began to trickle in, the conclusion many had drawn months before was the same one they were sticking to. She was ahead in electoral college votes and seemed well on her way to victory. Then, as the polls began to close on the East Coast and results trickled in, Americans were shocked to see that Clinton was losing ground and, after some time, was behind altogether. What started out as a snowball tumbled into a landslide as Trump continuously extended his lead and eventually won the election early in the morning on Wednesday, officially. Even before the announcement of Clinton’s concession of her campaign was announced, markets the world over were sent into a state of panic thank to the direction the election was heading. US stock markets as well as the US Dollar took nosedives while precious metals began gaining value rapidly.
Then, the world was shocked once more when Donald Trump emerged to deliver what can only be coined as a victory speech. Instead of the heated rhetoric we have heard for the past year or more, we instead witnessed a subdued, thankful Donald Trump. What’s more, he congratulated Hillary Clinton on a hard-fought race and showed levels of respect we, quite frankly, have no seen before. Since then, he has remained calm and the market has reacted accordingly. Though stocks dove at the thought of a crazy, unpredictable Trump taking the helm of the world’s strongest military, they bounced right back when people began to realize that perhaps things were not going to be as crazy as once believed. Now, there is a bit more normalcy across the global marketplace and, for precious metals, this is not good news at all.
James Bullard Talks Interest Rates
Though he did not comment directly on the results of Tuesday’s election, St. Louis Federal Reserve president James Bullard did talk about how he feels with regard to interest rate hikes. As you might expect, Bullard is a proponent of rates being raised in December as everyone is expecting that this will be the last good opportunity to do so. With a Republican controlled-Washington DC, there is no saying what will be thought of hiking rates.
Historically, Republicans have preferred rates to stay lower, so if they are not raised next month there really is no saying when the next good opportunity will be. What we do know, however, is that the next few months are going to be intriguing, if nothing else.