US midterms impact on gold, silver ETFs: Why bullion is rallying after Trump's setback — SkimNews
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- Gold and silver ETFs rallied about 5% in initial trading following Democratic gains in the US midterms, with MCX December gold futures rising ₹1,690 to ₹1,45,460 per 10 grams.
- US dollar and Treasury yields declined post-election, boosting non-yielding precious metals as investors priced in reduced geopolitical and inflation risks.
- Samit Guha of MMTC-PAMP stated that bullion prices are supported by safe-haven demand amid global uncertainties, including geopolitical developments and central bank policies.
- Crude oil prices fell after the election results, easing inflation concerns and contributing to a relief rally in emerging markets, including a 570-point gain in India’s Nifty 50 index.
- Motilal Oswal Gold ETF and Choice Gold ETF each gained 1.5%, while UTI Gold ETF, Invesco India Gold ETF, and 360 ONE Silver ETF also posted strong gains on the day.
- Investor expectations now include potential de-escalation in the US-Iran dispute, which could reduce pressure on the Federal Reserve to maintain high interest rates.
Why it matters: The Democratic sweep lowers near-term risk of military escalation with Iran, reducing inflation and rate-hike fears. This shifts capital toward non-yielding assets like gold, benefiting ETF investors and emerging markets sensitive to dollar strength and oil prices.
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