Full Article: Gold Prices Have Overreacted To The US Election
By: Sam Kirtley
To say it has been a turbulent week in markets would be a dramatic understatement. The moves around the US election were nothing short of incredible. We wrote last week about fading a risk off move over the election, and whilst we expected market nerves to calm after an initial period of uncertainty, we were completely blindsided by the pace and magnitude of the reversal. Nowhere are we more surprised than in the yellow metal’s reaction to the result. Not only do we view it as an overreaction, but actually view the gold prices as significantly undervalued in the current environment.
Inflationary Fiscal Policy
The market appears to have taken the view that a Trump presidency will be inflationary. Bonds have been sold, interest rates have risen, and the market has stepped up its expectations of Fed tightening. Given a December hike as a given, then market now has over 100bp of hikes priced in over 2017-2019.
Full Article: Gold Prices Have Overreacted To The US Election
By: Sam Kirtley
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