Market Report: Trumped!

by Alasdair MacLeod
Gold Money

This week saw the surprise nomination of Donald Trump as President-elect in the early hours of Wednesday morning.

So far as markets were concerned, Wednesday’s trading was a repeat of Brexit: spike in bond yields; collapse of equities followed by recovery; spike in gold and silver, followed by retracement. Gold on the day ranged over $60 between $1273.3 and $1337.5 before closing at $1276.

By early European trade this morning (Friday) gold ended sharply lower on the week at $1255, down from $1304 at last Friday’s close. It appears this weakness is driven by futures markets, since physical spot gold and silver are in backwardation out to December’s delivery. The tightness in physicals is reflected in silver, which rose from $18.42 to $18.61 on the week by last night’s close (Thursday). Gold futures contracts exchanged-for-physical on Comex jumped on Wednesday and Thursday to 45,000 contracts (4.5 million ounces) which is exceptional, and consistent with physical shortages in the market.

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