09 November 2016, Manila — Gold surged nearly 5 percent at one point in its biggest rally since June and oil touched multi-month lows on Wednesday as Donald Trump shocked the world by winning the White House race over Hillary Clinton, pushing investors out of risky assets.
Grains also retreated along with equities and the U.S. dollar as investors anticipated global uncertainty when Republican Trump takes the helm of the world’s biggest economy, having edged out Democratic rival Clinton. Copper recovered to hit its highest since September 2015.
The selloff in most risky assets was reminiscent of the market turmoil in June when Britain voted to exit the European Union which pushed gold up more than 8 percent at one point as investors chased safe havens.
“This is deja vu of the Brexit moment, very worrying,” said Bob Takai, president at Sumitomo Corp Global Research in Tokyo.
A wealthy real-estate developer and former reality TV host, Trump rode a wave of anger toward Washington insiders to defeat Clinton, a former first lady, U.S. senator and secretary of state. Mexico’s peso plunged to its lowest-ever level.
Spot gold rose as much as 4.9 percent to $1,337.40 an ounce, its strongest since Sept. 27. By 0746 GMT, it was up 3.1 percent at $1,314.83.
Trump’s win may push the U.S. Federal Reserve to hold off from raising interest rates next month, further burnishing gold’s appeal, analysts say.
“The market turbulence that a Trump victory looks likely to bring will deter the Fed from hiking next month,” said Craig Erlam, an analyst at Oanda.
Some commodities have come off the day’s lows when news of Trump’s victory was announced but remained down for the day.
Brent crude oil fell as far as $44.40 a barrel, its lowest since Aug. 11, and was last down 1.1 percent at $45.52.
U.S. West Texas Intermediate crude was down 1.2 percent at $44.46, after earlier hitting $43.07, its weakest since Sept. 20.
“The threat of growth forecasts being downgraded at least over the short-term due to investor uncertainty, in theory, weakens demand for commodities like oil,” said Jameel Ahmad, vice president of market research at the trading platform and research firm FXTM.
Copper on the London Metal Exchange rebounded, rising more than 2 percent to $5,362 a ton, its highest since September 2015.
Wheat, corn and soybeans each fell more than 1 percent.
In China, futures for steel and its raw materials bucked the decline in overseas markets, helped by a sustained rally in coal prices amid a shortage of the fuel. Iron ore and coking coal climbed 6 percent and steel jumped 5 percent.
*Manolo Serapio Jr.; Editing – Richard Pullin & Joseph Radford – Reuters