From CBA:
The US dollar tends to rise in times of uncertainty, stemming from a flight to safety. Market expectations that Trump will implement policy that is largely inflationary will also likely boost the US dollar. A stronger US dollar will apply downward pressure on commodity prices, as US$ denominated assets become more expensive to non-US consumers. Oil price benchmarks, iron ore, thermal coal and copper are the most at risk of declining in response to a higher US dollar.
Long term real yields tend to fall during risk events like Brexit and a Trump victory as bonds are purchased on safe haven demand. We use long term US real yields as a proxy for safe haven demand – so a more negative correlation implies greater safe haven demand for that commodity. This relationship has proven a more consistent gauge of safe haven demand than the US dollar because of the additional negative effect the US dollar has on commodity prices. Gold and silver, as we would expect, benefit the most from safe haven demand flows. Meanwhile, base metals see muted safe haven demand.
…Part of the reason for the lack of a sustained price reaction following the Brexit decision was the extent of uncertainty. Even today, the path for Brexit remains murky. Consequently, other market forces became more important.
A similar situation will likely unfold if Trump wins.
His policies run the real risk of being watered-down, delayed or even changed. As such, a significant degree of uncertainty will likely lead to a sharp price reaction on day one giving way to other market forces.
Yep.