KEY POINTS
- Kore Potash’s Kola project signs $1.93B EPC contract with PowerChina.
- Project includes provisions to mitigate delays and performance risks.
- Brazil and Africa are primary markets for Kola’s low-cost potash.
Gold prices dropped sharply following Donald Trump’s decisive victory in the U.S. presidential election, as investors turned their attention to surging stock markets and cryptocurrencies. In the two days after the Republican candidate’s win, gold recorded its worst performance across 13 U.S. election cycles, according to Deutsche Bank, declining nearly 7% since Election Day.
“Gold thrives when nothing else is working,” said Rob Haworth, senior investment strategy director at U.S. Bank. “Right now, equities are strong, and even low-quality corporate credit is seeing solid returns. That leaves little incentive to seek alternative assets like gold.”
Post-election market shift
Gold’s decline is a stark reversal from its prior performance, which saw the commodity gain over 30% in the year leading up to the election as economic and geopolitical uncertainties drew investors to its safe-haven appeal.
The bullish case for gold—fueled by fears of a contested election—dissipated as Trump’s clear victory calmed markets. According to a report by Mining Weekly, a rallying U.S. dollar has also pressured gold, which is priced in the currency, while easing inflation and a stable Federal Reserve policy have dampened expectations for further gains in bullion.
“Gold would be a contrarian call right now,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management. “The market sentiment suggests minimal risk fundamentally or geopolitically, making it hard to bet against the momentum in other assets.”
Investors shift focus to stocks and cryptocurrencies
Trump’s re-election and the Republican clean sweep have reduced uncertainty, with investors betting on tax cuts, deregulation, and infrastructure spending. Hedge funds are piling into financials and industrial stocks, with large-cap banks like Goldman Sachs rallying 10% post-election.
“We have more compelling places to put capital,” said Jay Hatfield, CEO of Infrastructure Capital Advisors, citing financials and other higher-risk assets over gold.
Cryptocurrencies have also benefited from the election results. BlackRock’s iShares Bitcoin Trust ETF surpassed $40 billion in assets, reflecting a sharp inflow into digital assets amid expectations of reduced crypto regulation under Trump.
“Speculative demand may shift from gold to cryptocurrencies,” said Kristina Hooper, chief global market strategist at Invesco Advisers.
Long-term outlook for gold
While gold has seen short-term declines, some analysts believe its long-term prospects remain intact. Trump’s policies, including tax cuts and tariffs, could lead to larger deficits and inflation, eventually driving investors back to gold as an inflation hedge.
In addition, potential disruptions to global trade and geopolitics during Trump’s second term could prompt central banks, particularly in countries like China and Russia, to increase gold purchases to diversify away from the dollar.
“Reserve managers in neutral or allied countries might be more cautious about erratic foreign policies and their impact on dollar reserves,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management SA.
For now, gold’s selloff presents a potential opportunity for long-term investors. “This is more of a buy-the-dip story,” De Mello added. “Gold’s recent decline has brought prices into a more affordable range.”
