Will the Gold Price Fall With Trump as President?

Gold prices fell sharply on the morning following the presidential election in the United States. Does this portend a trend over the next four years?

Trump Wins the 2024 Election

Donald Trump will return to the presidency following his election day victory. Trump won the race by a healthy margin, sweeping all of the "swing states" such as Pennsylvania, Georgia, Michigan, and Wisconsin. He also won the overall popular vote.

This makes President Trump both the 45th and 47th U.S. president. There has only been one other instance of an American president serving non-consecutive terms: Grover Cleveland, who was the 22nd president from 1885 to 1889 and the 24th president from 1893 to 1897.

How Gold Will Likely Perform Under Trump

There were two main reasons that gold's reaction to the election result was for prices to go down. First, the clarity of the election outcome removed a great deal of doubt and uncertainty, unlike what happened in the 2020 election. This clarity caused some safe-haven bets on gold to be unwound as geopolitical risks abate. Second, the dollar rose after Trump won, which usually drives gold lower.

It's worth pointing out that gold gained nearly 50% during Trump's first term.

It's somewhat unclear how the precious metals markets will respond to four years of Trump in office. Some of his administration's policy proposals, such as supporting a strong U.S. dollar, are not positive for gold. Yet other aspects of his platform will almost certainly help gold. For example, President Trump is likely to lean on the Federal Reserve to continue cutting interest rates. Government spending will also probably remain high, providing another reason for investors to hold gold.