On Monday morning (July 22), spot gold continued to rise, breaking through $2,410/ounce at the time of publication, up 0.41% intra-day. The uncertainty of the U.S. election has intensified, benefiting gold and silver for their safe-haven appeal. Earlier, Biden announced his withdrawal from the 2024 presidential race, throwing his full support behind Vice President Harris as the Democratic presidential nominee. Trump said the latter would be easier to beat than Biden. The opening of the market on Monday saw a weak U.S. dollar, which provided support for gold. Traders may lean toward the view that Trump (if he wins the election) will push the dollar lower. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

Market observers say Biden's historic move, less than four months before the November election, could exacerbate Wall Street's turmoil amid political chaos, at least in the short term. After the disastrous presidential debate, the so-called "Trump trading proposal" (which favors energy companies, banks and Bitcoin, and is unfavorable to electric vehicles and renewable energy) gained momentum and may cause turmoil.

The question of who will be the Democratic Party's nominee for president will largely return to the minds of investors after Biden's withdrawal. The market is expected to be volatile before the Democratic nominee is announced. Analysis suggests that this could show up in the performance of the U.S. dollar, causing volatility in fixed income and stocks.

Olga Yangol, head of emerging markets research and strategy at Credit Agricole, said, "People's first reaction is that this is negative for the dollar, but it's still too early to draw conclusions. This will largely depend on Harris' debut, the choice of running mate and the polling response in swing states. "

Rhona O'Connel, head of market analysis at Stonex, said that Biden's withdrawal, "my instinctive reaction is that everything is undecided in the short term, especially the Democratic nomination issue, but it could put the brakes on the "Trump trade". As far as hedging is concerned, purely from this perspective, gold's tail wind is stronger than its head wind. Biden's withdrawal means only one thing: he has brought a more powerful opponent to the Republican Party."

One question facing investors is whether to stick with the 'Trump trade' now that Biden has dropped his re-election bid. "Investors should expect volatility to skyrocket," Dave Mazza, CEO of Roundhill Financial, said ahead of Sunday's announcement. "If Harris can give Trump a substantive push, we should expect the volatility to continue. However, if Trump continues to lead in the polls and investors see his victory as inevitable, then the 'Trump trade' will be back in focus and volatility will decrease."

Grace Fan, Executive Director of Global Policy Research at Data.TS Lombard, wrote in a previous report that replacing the Democratic candidate means, "As the market re-adjusts its odds, the 'Trump trade' will waver but if Harris becomes the eventual candidate, those bets are unlikely to change significantly. "

"As Harris' chances of winning rise, so do the Democrats' chances of winning the House," said Steven Englander, strategist at Standard Chartered in New York. "If that happens, concerns about further fiscal stimulus could ease, reducing pressure on interest rates and the dollar. But it's still too early – campaign dynamics could look very different from expectations two weeks ago."

There is little historical data to interpret how the market will react. The last example of a sitting president not seeking re-election was Lyndon Johnson in 1968. "Unless there is a substantial change in Trump's odds of winning, traders may prepare for a weak dollar because there may be more verbal attacks on weak foreign currencies before November," said Mark Cranfield, strategist at Bloomberg. Meanwhile, the prospects for U.S. Treasuries will be even more subtle. The yield curve may continue to steepen on fears of rising deficits, but yields will fall against the backdrop of the Fed's first rate cut this year.

Here are more comments from other investors:

Wayne Kaufman, chief market analyst at Phoenix Financial Services:

"I hope our historic moment is a little less dramatic. Just last week, my team was discussing the impact of an assassination attempt on the market. In this time of uncertainty, the question is whether buyers on dips will come back. Valuation has always been a concern, and the optimism surrounding artificial intelligence largely supports the market, and we're about to enter August and September, which historically are weak months for the market. But overall, this is a historic market."

Matt Maley, chief market strategist at Miller Tabak + Co.:

"Trump trades like Bitcoin and energy will start to unwind, while trades that have been hit like solar stocks or electric cars will rebound. But there's still a lot of uncertainty, and the market doesn't like that. From now until Labor Day and then into September, we'll see a significant increase in volatility."

Yung-Yu Ma, Chief Investment Officer of Bank of Montreal Wealth Management:

"The 'Trump trade' is likely to take a breather until the Democratic nominee becomes more clear. Broadly speaking, the event injected more political uncertainty into the market, which may cause some volatility in the short term. This news has also shaken the currency and bond markets, and fund managers in emerging markets expect some early 'Trump trades' – including selling some currencies in Asia and Latin America and buying Salvadoran bonds – to be unwound, which brings short-term bullishness to risk assets. Concerns about the strong dollar under Trump's new government, coupled with tariffs and the possibility of a Republican landslide, have begun to put pressure on emerging assets and, under the uncertainty of the Fed's interest rate cut schedule, emerging assets continue to languish."

Jack McIntyre, Portfolio Manager at Brandywine Global Investment Management:

"The initial response, including risky assets such as emerging markets, will be positive. If everything goes smoothly, the Democrats can now take over the House of Representatives. The market generally wants to see more of this, rather than a Republican sweep."

Jennifer Gorgoll, Portfolio Manager at Neuberger Berman LLC:

"In the short term, the possibility of a Fed rate cut will dominate the market, possibly weakening the dollar, causing commodities and emerging market currencies to strengthen. This, coupled with broader risk appetite associated with the 'Trump trade,' sets the stage for a great performance in 2025 market, and we believe emerging markets may be the main beneficiaries."

Gregory Faranello, Head of US Rates Trading and Strategy at AmeriVet Securities:

"It is not yet entirely clear what this means for the interest rate market. In the bond market, this may lead to more stagnation. As we are not sure how fiscal policy will change, we do not think interest rates will change significantly. The US Treasury market will continue to focus on supply, balance sheet and economic data. We may encounter some unstable price movements, but the pricing of the Fed should continue to focus on the action that has been initiated."

Barry Knapp, Managing Partner at Ironsides Partners:

"Ultimately, uncertainty is increasing. What does this mean for futures opening? It's not clear yet. Bitcoin is a bit volatile. But we've just had a chaotic week, and I don't think that had much to do with Trump. I think it's more because of the weak economy and the expectation that the Fed will cut rates by 50 basis points in September. Ultimately, there are many things to be done, and this will bring more uncertainty."

Dan Suzuki, CIO of Richard Bernstein Advisors, said:" Investors need to accept the fact that the Fed is not in the driver's seat. They're just reacting to inflation, which in turn reacts to economic growth. Inflation may stubbornly remain above the Fed's target before economic growth noticeably turns upward or downward, and you're unlikely to see the Fed take any aggressive steps."

"The direct impact of his (Biden's withdrawal) is to add uncertainty to the claims that the Republican sweep the market. Apart from that, everything is unknown until the Democratic candidates become clearer."

Art Hogan, Chief Market Strategist at B. Riley Wealth:

"Biden's withdrawal has long been priced in by the market. The 'Trump trade,' if it exists at all, is no different from the fact that small caps are being rotated into because of the expected rate cut. The Fed may cut rates in September. In the current 'Trump trade,' the only notable thing seems to be the rise of bitcoin and other cryptos, as it is considered more favorable to this asset class."

Edited by Jeffrey