A huge Democratic win in the US midterm elections is reverberating across markets as the world adjusts.
Crude oil dropped 8% after the result became apparent, as the prospect of an escalation involving Iran receded, at least for the moment.
Gold and silver also rallied sharply, rising 3% and 5%, respectively.
Copper was flat but, notably, did not decline heavily as some had feared, partly due to the large inventory held in the US. These stockpiles have built up around President Donald Trump’s proposed tariff policy, which may now not come into effect.
Stock markets also rallied strongly. The New York Times writes:
“For investors, perhaps the most important takeaway from the midterms is that they are over. Uncertainty over what might happen on Election Day has historically weighed more heavily on the market than the clarity of a result, regardless of what that result has been.”
Beneath the current market exuberance, US inventories of diesel, a key fuel, are at their lowest level in two decades. The strength of the US economy is also keeping demand elevated.
Source: ANZ
Write to Callum Newman at Mining.com.au
Main image: Unsplash
