What Effect Has Trump Had on Gold?



Trump-led movements

Other than the Federal Reserve’s decisions, a few other factors also affect precious metals. The market has been gripped by fears surrounding the implementation of promises that President Donald Trump made during his election campaign.

Trump asked lawmakers on May 23, 2017, to cut $3.6 trillion in spending over the next decade, with a focus on removing funding from healthcare and food assistance programs and increasing funding to the military.

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Sentiments surrounding the Trump administration continue to see ups and downs, which could play on precious metals. Speculation has been swirling about the association of Trump’s presidential campaign with Russia during the 2016 election. Uncertainty and volatility in the markets often push metals higher, while a stagnant economy could pull them down.

Volatility and gold

The chart above is a depiction of the fluctuations in gold that could be impacted by market volatility, depicted here by the CBOE Volatility Index or VIX (VIXY) (VXZ). Volatility and gold could be positively related, but that’s not always the case. There’s a chance that gold and volatility could move against one another.

The fluctuations in precious metals due to volatility and other elemental changes also affects funds such as the SPDR Gold Shares ETF (GLD) and the iShares Silver Trust ETF (SLV). These two funds have seen year-to-date rises of 9.1% and 7.7%, respectively.

The mining shares that could also rise on a revival in precious metals include Hecla Mining (HL), Randgold Resources (GOLD), Kinross Gold (KGC), and Coeur Mining (CDE).


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