What Does Gold Do When Trump Tweets?
(Kitco News) - When President Donald Trump tweets, markets listen.
We saw this when he went on Twitter to slam Nordstrom for cutting his daughter’s fashion line. The department store’s stock dropped as much as 1% within a minute of his tweet.
My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person -- always pushing me to do the right thing! Terrible!— Donald J. Trump (@realDonaldTrump) February 8, 2017
But when it comes to gold, the metal is a little more resilient to Trump’s Twitter rants.
Looking at a daily chart since Trump was elected president, gold saw its biggest spike the day the election results came out. The unprecedented win took markets by storm and investors flocked into the safe-haven metal, pushing it up nearly 5% even if the gains were short-lived.
Such a beautiful and important evening! The forgotten man and woman will never be forgotten again. We will all come together as never before— Donald J. Trump (@realDonaldTrump) November 9, 2016
It wasn’t until May that the metal saw another notable spike, pushing up nearly 2% as geopolitical uncertainty rose following news that Trump had shared sensitive information with Russia. The metal traded around $1,258.70 an ounce at the time.
As President I wanted to share with Russia (at an openly scheduled W.H. meeting) which I have the absolute right to do, facts pertaining....— Donald J. Trump (@realDonaldTrump) May 16, 2017
...to terrorism and airline flight safety. Humanitarian reasons, plus I want Russia to greatly step up their fight against ISIS & terrorism.— Donald J. Trump (@realDonaldTrump) May 16, 2017
And who can forget heightened tensions with North Korea, which saw gold rally some 1.6% in early April.
North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them! U.S.A.— Donald J. Trump (@realDonaldTrump) April 11, 2017
On the flip side, gold has also seen significant dips during Trump’s presidency, most notably in November, shortly after his win.
The 5% election gains were brief, with prices dropping about $40 an ounce on November 11. Investors were quick to jump back into equities as Trump promoted his plans to “make America Great Again.”
Busy day planned in New York. Will soon be making some very important decisions on the people who will be running our government!— Donald J. Trump (@realDonaldTrump) November 11, 2016
However, when you look closely, it seems President Trump’s approval – or disapproval – ratings might have a stronger correlation with gold prices than his tweets do.
Gold’s biggest spikes – from opening prices to intraday high – typically correlated with stronger disapproval ratings for President Trump. For instance, on May 17, gold rallied nearly $25 from its open to its high. According to fivethirtyeight.com, Trump’s disapproval rating stood at nearly 55% that day.
Meanwhile, on gold’s biggest down days, which were shortly after Election Day, the President’s approval rating stood at 42%, according to Gallup.