Gold down, Bitcoin up! How Trump’s victory changed financial market dynamics

economictimes.indiatimes.com:

economic uncertainty. Gold, a classic safe-haven asset, has seen a decline of nearly 5%, while Bitcoin, the world's largest cryptocurrency in value terms, has surged approximately 30%.

According to a research note by Gavekal Research, this divergence can be attributed to market perceptions of the policy implications of the Republican Party’s electoral victory. The report notes, “Clearly market participants have concluded that the Republican Party’s victory is negative for gold and positive for Bitcoin and other cryptocurrencies.”

Gold's decline is closely tied to expectations surrounding US fiscal and monetary policies. The Republicans are expected to introduce tax cuts, increase government spending, and reduce regulatory constraints, all of which could drive stronger economic growth and higher inflation. As a result, the US dollar has strengthened, which has put downward pressure on gold. “As the market has begun to price this in, the US dollar has risen against other currencies — and against gold,” the report states.

Although the Federal Reserve (Fed) has been easing policy in response to disinflationary pressures, a shift in fiscal policy could force the Fed to alter its stance. If the Republicans’ policies trigger