As the election counts began coming in on the evening of Nov. 8, the markets reacted chaotically as the night wore on to the reality that Donald Trump victory was going to be the next President of the United States. And this market turmoil led to the dollar, stocks, and gold all moving in extreme opposition to what the markets had anticipated when they closed for business on Tuesday.
Yet the most interesting thing occurred within hours of seeing the Dow futures down 840 points, the dollar down 300 bps, and gold up $61... these markets all reversed and by the time trading was over on Wednesday gold had lost all of its gains, the dollar had recovered all of its losses and more, and stocks closed well into the green.
So the question then remains is, does a Trump victory mean the end to the gold bull market, or was this 'recovery' a last ditch effort by the Fed and Treasury to prop up paper markets?
Perhaps the answer lies over in Europe where following the Trump victory gold sales all across the continent were occurring at a record pace.
Spot gold prices surged nearly 5 percent with Donald Trump's surprise U.S. presidential election win spurring purchases of physical gold
The flurry of buying on physical markets mostly took place in Europe, after Trump's victory was declared, when the price of spot gold surged by nearly 5 percent to a six-week high of $1,337.40 an ounce.
Gold gave up gains during U.S. trading and turned slightly negative, as the dollar moved higher and Wall Street stocks rose sharply. [MKTS/GLOB]
"Overnight, there has been a tremendous increase in our sales," said Oliver Heuschuch, head of trading for Degussa's gold business, one of the biggest German physical dealers.
"It's nearly treble the size of regular business."
Ahead of the election, analysts widely expected that a Trump victory would cause gold prices to rally as investors sought refuge in perceived safe-haven assets such as gold.
Demand for physical gold and silver in the United States rose in the weeks prior to the vote, but in contrast to Europe there was little sign of buying in the United States on Wednesday.
"Today's figures are already some of the best on record, even surpassing our performance following the Brexit vote," said Chris Howard, director of bullion at the United
Kingdom's Royal Mint, about Signature Gold sales that involve customers buying gold that is stored at the mint.
The Pure Gold Company in London said its sales spiked 42 percent early on Wednesday versus the prior day. - Reuters