Gold bumps around – but hang onto it for insurance

Gold jumped by more than 5% on the news of a Trump victory. But the bounce hasn’t lasted. The yellow metal promptly sank to a six-month low. Trump’s conciliatory victory speech fuelled hopes that his bark is worse than his bite. Global risk appetite recovered as investors chose to concentrate on the parts of his programme that should stimulate growth, such as his tax cuts and plans to boost infrastructure spending, instead of his protectionism and political unpredictability. The prospect of higher interest-rates due to rising inflation makes gold less appealing, since it offers no yield. Dearer money [...]