Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Yesterday as the news came out that billionaire businessman Donald Trump is closing in to become the next president of the United States, the market suffered tremendous volatility. US benchmark stock index, S&P500, which opened at 2140, declined by almost 5 percent to trade as low as 2032. But by the end of the day, the market not only recovered but was up more than 1 percent for the day. So, how did that happen? When all the reports painted a doom gloom picture, similar to Brexit case, in the case of a Donald Trump win.
- First of all, there were lots of uncertainties with regard to the US election. There were clear threats of legal actions, as Mr. trump said that he would not disclose, whether he would accept the result or not.
- Secondly, the members of the House of Representatives said that they would not back policy proposals of Hillary Clinton, should she become the President.
- While the above threats diminished with a win by Donald Trump, we suspect that the market is sensing opportunities in a Trump Presidency. Several of Mr. Trump’s proposals such as cutting of corporate taxes, investing in American infrastructure, remove unnecessary regulation are actually positive for the market in the longer run. A Republican-controlled Senate, House of Representatives, and the White House make that very easy.
We forecasted that Mr. trump would win and we stand by out other forecasts that a Trump Presidency would be good for the US, good in reducing geopolitical tensions and will be positive for the dollar.
