Donald Trump's U.S. presidential victory has spurred safe-haven buying of physical gold in Europe, but traditional bullion holders in the United States are standing pat. After all, many of them are optimistic after voting for Trump.
The contrast in reactions to Trump's surprise victory shows a wide difference in how investors in the two markets evaluate risk. For many outside the United States, Trump's pledge to rewrite the playbook on trade and international relations prompted defensive gold buying. U.S. investors were more likely to be dumping gold in favor of stocks and bonds.
U.S. precious metals investors "view a Trump victory as a good thing and, therefore, there's not a tremendous amount of panic," said Tarek Saab, chief operating officer and co-founder of Texas Precious Metals. Saab was a finalist in Trump's reality TV show "The Apprentice" in 2006 and has golfed and dined with him.
"Since the majority of our client base were Trump supporters ... that's the reason we've seen a bit of slowness in the industry."
Texas Precious Metals' sales have tapered off around 20 percent in November from pre-election sales in October, the highest selling month of 2016 so far, Saab said.Gold is a traditional safe haven commodity that people buy in times of uncertainty, what some call a "fear trade."
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, which trades on NYSE Arca in the United States as well as other exchanges, have slid 4.8 percent since rising the day after the election. That was the biggest eight-day drop since April 2013. [HLDSPDRGT=XAU][GOL/ETF]
Spot gold prices soared nearly 5 percent above $1,337 an ounce after the election, but have swooned since then to a 5-1/2-month low near $1,200.
"I feel as though Trump is generally positive for the economy and I am hopeful that a Trump presidency will help reignite our sluggish economics," said Saab.