Trump’s Victory In Electoral College And Gold

On Monday, Donald Trump won the Electoral College vote. What does it mean for the gold market?

Donald Trump officially became the president-elect, as electors voted in his favor. He got 304 of the 306 Electoral College votes he earned. Despite concerted efforts to induce electors to change their votes, only two Republicans in Texas did so. One of them voted for Ron Paul and one for John Kasich. Ironically, there were more defects among Clinton’s electors, as she got 227 of the 232 Electoral College votes she earned. Three electors in Washington voted for Colin Powell, the Former Secretary of State, while one elector voted for Faith Spotted Eagle, an elder in the Yankton Dakota tribe. And one elector in Hawaii voted for Bernie Sanders. Three more electors in different states tried to defect, but their votes were invalidated. Therefore, the idea to block Trump from becoming president by convincing electors to defect completely failed. It was actually doomed from the start, as anti-Trumpers needed to convince 37 electors.

What does it mean for the U.S. politics and the gold market? Well, Trump is now cleared to be inaugurated on January 20, 2017. It reduced the last potential obstacle on his way to presidency, which is bad news for the yellow metal, as financial markets expect faster economic growth and higher interest rates under Trump’s presidency. Clinton’s victory in the Electoral College would have shaken the markets and boosted the price of gold. However, such a scenario was highly improbable, and Trump’s victory was widely expected, therefore the Electoral College vote should not entail any significant effects on the price of gold.

To sum up, Trump easily won the Electoral College vote. In January, he will become America's 45th president. However, it is not the end of uncertainty about Trump’s presidency, as anti-Trumpers will probably try to attack him over his business ties and push for impeachment. Such efforts could increase the uncertainty and spur some safe-haven demand for gold, but it is still an unlikely prospect. What is much important for gold is how long the Trump honeymoon in financial markets will last.