Although Trump’s looser stance on fiscal matters and penchant for tariffs are likely to weigh on gold prices in the short-term, the structural case for gold remains compelling as US fiscal deficit looks set to grow under Trump while the return of the inverse gold-rate/ dollar correlation since 2H24 remains the main tailwind for gold in recent times

• Policy rate trajectory appears to be unaffected by Trump’s victory for now
• "Higher for longer” is not a given with no evidence that yields will increase post-election
• Rising fiscal deficits to drive long-term gold demand through safe haven demands, a weaker dollar, and policy rate constraints
• Gold to remain structurally bullish despite short-term uncertainties

Figure 1: Treasury yields, dollar have risen post the US election

Source: Bloomberg, DBS