Markets
Trump shooting: Gold could hit record high, dollar and cryptocurrencies set to surge
Police cars outside the residence of Thomas Matthew Crooks, the suspected shooter at a Trump rally on Saturday, survey the area in Pennsylvania. As a result of the incident, one rally-goer was killed, two other rally-goers are in critical condition, and Donald Trump suffered a non-fatal gunshot wound. The shooter died after being shot by the U.S. Secret Service. (Photo by Kyle Mazza/Anadolu via Getty Images)
Market watchers say investors will initially favor traditional safe-haven assets and may turn to trades most tied to former President Donald Trump’s chances of winning the White House after surviving an assassination attempt.
“There will definitely be some protectionist or safe haven moves in Asia early in the morning,” said Nick Twidale, chief market analyst at ATFX Global Markets. “I think gold could go to all-time highs, we’ll see the yen bought and the dollar bought, and flows into Treasuries as well.”
Early market commentary suggests that Trump’s assassination at a rally in Pennsylvania on Saturday could also prompt traders to boost his chances of winning the November election. His support for looser fiscal policy and higher tariffs is widely seen as likely to benefit the dollar and weaken Treasuries.
An early indicator of market sentiment heading into the weekend: Bitcoin surged above $60,000, likely reflecting Trump’s pro-crypto stance.
Other assets positively linked to the so-called “Trump trade” include stocks of energy companies, private prisons, credit card companies and health insurance companies.
Traders will also be closely watching market measures of expected volatility on Monday, such as those in the tariff-sensitive Chinese yuan and the Mexican peso, which had begun to price in the U.S. vote.
Trump said he was shot in the right ear after gunfire erupted at his rally. His campaign said in a statement that he was “fine” after the incident, during which he was rushed off stage.
“Currencies will be the first major market to react to the weekend surge in Asia on Monday. There is a risk of further volatility, and it could be particularly difficult to get a clear view as liquidity is hampered by the Japanese national holiday,” said Garfield Reynolds, head of the Asia team for Bloomberg Markets Live.
Strategists were already expecting a volatile election campaign, particularly as Democrats continue to grapple with questions about President Joe Biden’s candidacy after his poor performance in last month’s debate raised questions about his age. Investors were also grappling with the possibility that the election could end in a protracted conflict or political violence.
But there is little precedent for events like those in Pennsylvania. When President Ronald Reagan was shot four decades ago, the stock market tumbled before closing early. The next day, March 31, 1981, the S&P 500 index rose more than 1% and the benchmark 10-year Treasury yield fell 9 basis points to 13.13%, according to data compiled by Bloomberg.
Bond investors should pay close attention because the attack is likely to boost Trump’s election chances and ultimately raise concerns about the fiscal outlook, according to Marko Papic, California-based chief strategist at BCA Research Inc.
“The bond market should at some point realize that President Trump has a better chance of winning the White House than any of his rivals,” Papic wrote. “And I continue to believe that as his chances increase, the likelihood of a bond market riot should also increase.”
Kyle Rodda, senior financial markets analyst at Capital.com, said he saw client flows into Bitcoin and gold following the shooting.
“This news marks a turning point in U.S. policy norms,” he said. “For markets, it means safe haven trading, but more of it skewed toward non-traditional safe havens.”