Gold Tumbles With Dollar Rising as Trump Extends Lead in US Vote

Gold tumbled and the dollar surged as Republican nominee Donald Trump extended his lead in the US presidential election, Bloomberg reported.

Bullion fell as much as 1.4% after the key battleground states of North Carolina and Georgia were called for Trump.

The precious had been expected to rally if a Trump win was looking likely, but that appears to have been canceled out by gains in the dollar, which makes the precious metal more expensive for many buyers. A gauge of the US currency was up as much 1.6% to a one-year high and Treasury yields also surged in another headwind for the precious metal.

Trump has a more tentative advantage across Wisconsin, Michigan, Pennsylvania and Arizona. Democrat Kamala Harris still has a narrow path to victory, and it’s possible a final result may not be known for days, with the uncertainty potentially benefiting gold.

Some investors have bet heavily on a Trump victory in recent weeks. Trades tied to his pro-growth agenda have buoyed the dollar. However, nervousness over steep trade tariffs that Trump is pledging may also see investors flock to havens like bullion if he wins.

“While a stronger US dollar and higher yields in a Trump win may be headwinds for gold, this will be balanced with potential safe-haven demand in the event of any trade tensions from potential tariffs,” said Jun Rong Yeap, a market strategist with IG Asia Pte.

Gold has surged more than 30% this year in a record-setting run that’s been powered by heightened geopolitical and economic risks, driving purchases by central banks and consumers alike. The rally has intensified in the last few months as the Fed pivoted to rate cuts and the US election loomed.

“A Republican sweep could fuel concerns about excessive government spending, pushing the debt-to-GDP ratio higher and likely bringing more hedging demand for gold,” said Charu Chanana, a strategist at Saxo Capital Markets Pte.

Spot gold fell 1.3% to $2,708.48 an ounce as of 2:43 p.m. in Singapore. The Bloomberg Dollar Spot Index climbed 1.6%. Silver, platinum and palladium all tumbled.

The election has overshadowed the Federal Reserve’s rate decision on Thursday. A 25-basis point cut has already been priced in, and is unlikely to impact bullion, Commerzbank AG said in a note by analysts including Carsten Fritsch.