By 16:17 AEDT, Trump had extended his lead – achieving 230 Electoral College votes (from 51% of votes counted) to Harris’ 210 (from 48% of votes counted).

He had also gained North Carolina – the election’s first crucial swing state, and it was also confirmed that the Republican Party had won a majority in the US Senate.

Saxo Chief Macro Strategist John J. Hardy said the former President’s strong performance thus far had created ripples in financial markets.

“Markets are piling into the Trump 2.0 Trades (Bitcoin is the night’s big winner in percentage terms) as everything is going his way as votes accumulate and Harris’ path to victory looks increasingly unlikely,” he said.

“While patience is still required, markets are already trying to call this. It is important to remember that ‘proper’ Trump 2.0 Trades require control of the House – it will possibly be days before we know the results of all House elections.

“However, with Trump’s popular vote so much stronger than the last two elections, the odds are leaning higher.”

Bitcoin hit its previous record in March following the launch of US spot-bitcoin exchange-traded funds.

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And offering a critical backdrop, there is the ongoing reality of geopolitical instability and tensions, as well as news flow from critical economies such as China, which have driven rallies but also demanded a closer inspection to predict where commodity prices may go in the future.

One of the most talked about of these commodities is of course, lithium, which hit an all-time high of 5750,000 Chinese yuan per tonne (CNY/t) in December 2022 before slumping and showing volatility ever since; it’s trading now at 72,500 CNY/t.

This year has been a particularly bad one for the critical metal, with it falling 24,000 CNY/t since the start of 2024, based on trading on a contract for difference (CFD) which follows lithium’s benchmark market.

Reflecting on these patterns, Saxo Bank’s Head of Commodity Strategy Ole Hansen said the lithium market appeared to have reached its lowest point, but a move up again could take time.

“The lithium market remains challenged by the overproduction capacity built up during and after the 2022 surge and subsequent collapse,” he said.

“With the current price starting to make some projects uneconomical, it’s our view that the race to the bottom has ended – however, for the price to recover, demand has to improve, and this may take longer to achieve given the slowdown in EV rollouts.”

Despite being highly watched and newsworthy, the market for electric vehicles (EVs) is definitely on a slow track, as evidenced by Ernst & Young’s fifth annual Global Mobility Index, which showed demand levelling off, with buyers expressing concern about the infrastructure for charging.

Released in September, the report included 19,000 respondents across 28 countries, and indicated that interest in purchasing an EV was still present – rising from 55% to 58% since the previous year – but still sluggish, with demand shifting from 30% to 55% between 2020 and 2023.

For most respondents (27%), their key issue was lack of charging infrastructure, while 25% said they were concerned about EV range, and 18% saying that the length of time taken to charge the vehicles was also on their minds.

A new question in the survey – on the cost of battery replacements – returned a 26% expression of concern about this issue.

But this reflects only one part of a wider story, which Mr Hansen said was a move by investors away from stocks connected to the green energy transition.

“I see very little enthusiasm for green transformation metals and the companies involved – reflected in the steep losses the related stocks have witnessed in the past 18 months,” he said.

“For that to change, the fundamental outlook needs to improve, followed by hedge funds abandoning long held and very profitable short positions across the green transformation and energy storage sectors.”

Mr Hansen also pointed to economic news coming out of China as an underpinning factor in the performance of lithium and other metals.

“China has yet to address their overriding problem, which is low consumer confidence, and an oversupply of housing funded by underfunded banks and local governments,” he said.

“With that in mind, a recovery will be bumpy, but overall, the electrification of China is ongoing at a rapid pace and that will continue to underpin demand for copper and lithium while other products like steel and iron ore may struggle.”

The red metal has – in contrast to lithium – experienced a very good year indeed, reaching an all-time high of US$5.20 per pound (lb) in May, with an overall rise of 0.45 USD/lb or 11.60% since the start of 2024. (Currently trading at US$4.33/lb.)

“Copper continues to receive a great deal of focus from investors looking for higher prices amid strong and rising demand driven by the green transformation,” Mr Hansen said.

“However, the rallies seen this year have been unsupported by fundamentals, as China’s housing sector has struggled and inventories monitored by the major futures exchanges have stayed elevated.”

He added investors might be cautiously looking at conditional factors in the short term but maintained that copper would be on solid ground in the long-term.

“We maintain a bullish outlook for copper but for now, the upside is limited due to an overhang of supply and worries about the economic outlook,” Mr Hansen said.

“The electrification of the world is real and, in the coming year, the combination of robust demand towards grid upgrades and electrical appliances will likely be met with tight supply from miners struggling to increase production.”

An even stronger performer this year has been of course, gold – which reached an all-time high of US$2,790 per Troy ounce on Wednesday (October 30), with an overall rise of US$721.72/t oz, or 34.99% since the start of 2024.

Given the proximity of this recent leap to the U.S. election next Tuesday, one could be forgiven for thinking this was the key factor to keep in mind. Mr Hansen said it was certainly relevant, but added that a long list of other political and economic concerns were also keeping this commodity strong.

“I see limited signs of exhaustion in the gold market,” he said.

“The metal has rallied by more than 30% this year as investors around the world seek protection against multiple uncertainties, all pointing to an unsettled world.

“The main drivers of this bullish phase include concerns over fiscal instability, safe-haven demand, geopolitical tensions, de-dollarisation driving strong demand from central banks, Chinese investors turning to gold amid record low savings rates and property market fears, and increased uncertainty surrounding the US presidential election.

“Additionally, rate cuts – by the US Fed and other central banks – are reducing the cost of holding non-interest-bearing assets like gold and silver. This environment is already spurring renewed interest in gold-backed ETFs, particularly from Western asset managers who have been net sellers since May 2024.”

When it comes to the link between the Trump-Harris race and trends in the gold price, Mr Hansen outlined a theory of how fears about a Republican-dominated political scene were pushing investors towards the safe haven of this metal.

“Given how the geopolitical risk premium has deflated in crude oil (which slumped the most in two years on Monday), we conclude that the latest strength in gold is increasingly being seen as a hedge against a potential ‘Red Sweep’ in the US election, where one political party (in this case, the Republicans) controls both the White House and Congress,” he said.

“This scenario raises concerns about excessive government spending, pushing the debt-to-GDP ratio higher, while fuelling inflation fears through tariffs on imports and geopolitical risks.

“Investors are turning to precious metals as protection, even as expectations for lower rates and easier financial conditions fade, as the FOMC may end up being forced to pause the current rate-cutting phase.”

At this stage, the race is still very tight, with a CNN report on Wednesday indicating Harris maintains a tiny edge over Trump in two of three key states and is tied with him on the third.

Michigan voters appear to favour Kamala Harris by 48% compared to Trump’s 43%, while in Wisconsin the difference is 51% in her favour, against 45% for Trump. In Pennsylvania, voters have shown 48% support for each candidate.

Upon news of the result next week, Hansen added, the situation for gold might change.

“Nothing ever goes in a straight line and, having rallied as much as it has, gold can still run into a deep correction after November 5 if a ‘sweep’ scenario does not ensue,” he said.

“But as long as the above-mentioned reasons for holding gold do not go away, the prospect for even higher prices remains.”

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The news proves wrong critics of the company which have, full disclosure, included myself – more than once. While its flagship production well is producing less than 2,000bpd; and while brent crude has dipped to the US$70/bbl mark, it’s still a success story for a little Aussie battler – and everybody loves an underdog.

Elsewhere, all eyes were on the US Harris-Trump debate this week which isn’t going to decide the election either way and where the “winner,” apparently, depends on who you support. Trump, in typical fashion, came out with a real banger: immigrants are crossing the border into the US and eating the family pets of good, god-fearing, red-blooded Americans. 

That went down about how you’d expect, admittedly, it was the highlight of an otherwise uninspiring television event. (ABC host David Muir was also, at times, particularly amusing.) 

But in the world of finance and markets, all eyes ended up on the other superpower (that isn’t China) – Russia. President Putin, perhaps jealous of all the attention not being paid to him, made a televised address where he basically threatened to ban exports of nickel, uranium, and other metals onto world markets. He also threatened all-out-war, again.

Markets cared more about the commodity implications. Outside of the western allied countries, Russia exports an awful lot. The implications were enough to send all kinds of commodities higher; coupled with Chinese CATL’s apparent plans to shut down two lithium mines, the ASX materials sector had a ripper week, up around +4% WoW. 

Another thing putting wind in the ASX’s sails: acceptably tame US inflation has solidified expectations of a rate cut from the US Fed later this month, the ECB also cut rates, blah blah blah. I found something from left of field in markets this week far more interesting.

A well-known quant chief over in The States, Cliff Asness, has released a heavily opinionated and perhaps overwrought paper on the impacts social media has had on stock markets over the last thirty years. While it takes him about 12 pages to start making a point – think of it more as an ambling blog post, much like what you’re reading now – he points towards a deterioration of efficiency in stock markets over relatively recent history and it’s his ultimate belief stock markets have allowed misinformation to thrive. 

Information has always been available, he reckons, but says these days, people aren’t as good at making common sense conclusions based on news. That means investors can expect bigger returns in an uncertain future, but less success with stock-picking. 

The general thrust of his paper, that social media is causing a breakdown of consensus reality, feels fairly uncontroversial to me. Unfortunately, there may need to be more rigorous evidence collection and less opining for that to be proven. But it’s definitely worth, at least, an attempted read.

Check out his “Less-Efficient Market Hypothesis.” Just don’t tell any HotCopper power users.