A Surprising Call on Gold

The SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) and other gold exchange traded products such as Rex Gold Hedged S&P 500 ETF (GHS) and Rex Gold Hedged FTSE Emerging Mkts ETF (GHE) were supposed to be winners if Donald Trump pulled off the upset in Tuesday’s presidential election.

Trump did just that, but gold ETFs traded slightly lower and some technical analysts believe the yellow metal could face more downside as financial markets potentially realize that the specter of a Trump presidency is not as grave as previously thought.

Related: Demand Supports Gold ETFs

“Looking at a long-term chart of gold dating back almost a decade, Piper Jaffray technical analyst Craig Johnson sees a downtrend that began in 2011, when gold hit record all-time highs. Based on that downtrend, Johnson believes that gold’s rally this year is really just temporary and investors should be careful of an impending drop in gold prices — even if Donald Trump were to win Tuesday’s election,” CNBC reported in advance of Tuesday’s election results.

As ETF Trends reported earlier this week, Democratic challenger Hillary Clinton may have actually been the preferred victor for gold ETFs because historical data suggest gold performs better when Democrats are in the White House.

“While volatility and fear generally have supported gold around election uncertainty (in fact, this year through Oct. gold in the index is posting its 6th best year ever going back to 1979 (+19.3 percent) and is on pace for its best year since 2011,) gold does significantly better under the historical Democratic presidencies, adding 24.3 percent on average in Democratic terms versus Republican ones since 1978,” according to a recent note by S&P Dow Jones Indices.