While the market was still speculating on what would lies ahead when he takes office, the general consensus is that fiscal spending is far easier to achieve than other reforms he has proposed, said Alex Merk, president and CIO of Merk Investments. That should underpin the appeal of gold as an inflation hedge.
"Ultimately, what is going to matter is if inflation is going to tick up more than rates are going to pick up–meaning is the Fed going to be behind the curve or not? If the Fed is behind the curve, then gold should do just fine; if however the Fed is able to get in front of this or if inflation is not going to materialize much but the yield curve remains steep and real rates rise, then yes, the gold selling is over," he added.
Gold prices spiked nearly 5 percent last week on risk aversion as results the presidential results rolled in but have since sinked to a six-month low on Monday as the dollar strengthened. The spot gold price was around $1,224 an ounce Tuesday in Asia as the market weighed Trump's economic plans.