Updated at 5:16 p.m. ET
Kitco reports that the price of gold Wednesday evening had fallen
back below $1,300.
As of 5:16 p.m. ET the price of gold stood at $1,278.20 per ounce.
As you'll read in the original post below, that figure is actually
down slightly from Monday's close.
Here's more on the price normalization from Kitco's
In the wake of the unexpected election of President-elect Donald
Trump, gold has hit a six-week high and surpassed the $1,300 mark
Wednesday morning, according to Kitco.
As of 9:28 a.m. ET Wednesday morning, the price of gold stood at
$1,303.40. The price had closed Monday night at $1,281.20.
The rise in the price of gold comes as financial markets around the
world fell in response to the uncertainty caused by a Wednesday
morning result that most had not seen coming.
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“The polls were wrong and the world marketplace was ‘wrong-footed’
as Trump won the U.S. presidential election over Hillary Clinton,” Jim Wyckoff wrote on Kitco.com Wednesday
morning. “Global financial markets and gold started sensing trouble
with their previous thinking when early election results starting
rolling in Tuesday evening. It’s not often that the general sense of
the marketplace is wrong, but it happened overnight. And those who
were wondering about a repeat of the U.K. Brexit vote in June were spot on. The U.K.
voted to exit the European Union despite polls showing otherwise.”
At one point in the overnight hours, the price of gold hit $1,338.30
in December futures. They have since backed down slightly.
“How long will the increased markets volatility last?”Wyckoff asks.
“Likely not long. Markets are quick to factor in unexpected events and
it won’t be long until they return to more normal price action,
including the precious metals.”
Gold is a safe-haven asset
Why is gold on the rise Wednesday?
Gold investing has historically been viewed as a hedge against the
unpredictability of the overall economy, and in turn, a safe haven
when other markets experience a downturn.
A Trump win was not expected, and as previously mentioned, the
financial markets have not reacted positively to the shock. That
financial downturn is naturally paired with a rise in gold buying.
Gold is valuable. That is based on the fact that we know there’s not
a lot of it, and we know it is appealing to people. So while the
health of someone’s investments in the stock market is subject to the
performance of the companies invested in, gold is a known commodity
with a value that, while it does fluctuate over time, generally does
not fluctuate with the suddenness that a company’s stock can.