Gold has Biggest Rally since Brexit as Trump Wins

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On Wednesday, gold jumped approximately 4% to its strongest in over five weeks as investors pursued safe havens with Republican Donald Trump leading Democrat Hillary Clinton in the battle for the White House.

It marked gold’s biggest single day gain since June when it increases as much as 8% when Britain decided to exit the European Union.

Trump won the key battlefield state of Ohio and led Clinton to a chain of other states that were too close to call, including Florida and North Carolina.

According to media reports, Trump is leading Clinton by 36 Electoral College votes, as of 10:35 p.m. Eastern Standard Time (0335 GMT on Wednesday).

Spot gold increase as far as $1,323.10, its strongest since Sept. 30, and was trading up 3.2% at $1,315.84 by 0341 GMT.

If Trump wins “there’s more uncertainty in his platform and the direction that his policy may aim, so there may be more volatility with risk assets and over the short-term you may have investors flock to gold,” said Mark Watkins, regional investment manager with The Private Client Group of U.S. Bank.

The U.S. dollar dropped and stock markets knocked into reverse in wild trade as investors faced the real probability of a surprise win by Trump that could overturn the global political order. Sovereign bonds shot higher, although the Mexican peso went into almost free fall.

Deliver of U.S. gold for December was last up 3.3% at $1,317.30 an ounce, after earlier hitting $1,324.30.

Spot silver increase as far as $18.84 an ounce and was last up 1.9% at $18.69.

U.S. rates futures indicate traders see only 36% possibility of the Federal Reserve raising interest rates the upcoming month, which should support additional gains in gold.

“The market turbulence that a Trump victory looks likely to bring will deter the Fed from hiking next month,” said Craig Erlam, an analyst at Oanda.

“Given that markets have strongly priced in a hike, I think we would see a significant repricing over the coming days, with odds falling dramatically from above 80 percent where it stood yesterday.”

On Additional News

On Wednesday, oil prices plunged as vote counting indicated Donald Trump leads ahead in a surprisingly tight U.S. presidential election, tossing world markets into chaos in an outcome reminiscent of the June’s Brexit vote.

Crude futures markets sounded into action, with trading accelerating as Europe merged Asia from around 0500 GMT, as Trump surprised by beating Democrat Hillary Clinton in a series of key contests and opening a path to the White House.

U.S. West Texas Intermediate (WTI)  crude futures drop  to a session low of $43.07 per barrel, down more than 4% from their last close and their lowest since September, before edging back to $43.72 a barrel by 0601 GMT.

International Brent crude futures were down 2.43% at $44.92 a barrel.

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