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How the Trump Trade Fear Is Moving Precious Metals

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How the Trump Trade Fear Is Moving Precious Metals PART 1 OF 8

Does Trump Still Have a Take on Precious Metal Movement?

Trump unrest

Speculations have increased over President Donald Trump’s commitment to deliver on his tax and banking reforms and infrastructure spending. After the November 8, 2016, presidential election, hopes for economic growth pumped up. However, after the failure of the healthcare bill, questions were raised about Trump’s ability to stand by his campaign commitments.

Haven bids for gold increased as concerns rose over what Trump would do with trade. Gold, silver, and platinum rose 1.8%, 0.95%, and 0.97%, respectively, on Wednesday, May 17, 2017. The rise in these metals was due to market instability based on Trump policies.

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Haven bids

Investors often flood haven assets during growing uncertainty in the markets. Gold and Treasury yields are a few famous havens. The rise in gold and silver over the past three months can be seen in the iShares Gold Trust (IAU) and the iShares Silver Trust (SLV). IAU and SLV rose 1.9% and 0.44%, respectively, on Wednesday, May 17.

In the rest of this series, we’ll look at the implications of many factors that play on precious metals. The US dollar, the interest rate, market volatility, and equities likely played roles in moving gold and silver.

Mining shares have rejoiced at the rise in metals. On Wednesday, miners that rose the most were AuRico Gold (AUQ), AngloGold Ashanti (AU), Gold Fields (GFI), and Harmony Gold (HMY). They rose 3.6%, 4.1%, 4.4%, and 3.5%, respectively. Combined, these four miners contribute about 10.0% to the fluctuations in the VanEck Vectors Gold Miners ETF (GDX).

Next, let’s focus on the impact of equities on gold.

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