(Bloomberg) — Gold (GC=F) fell on a surging dollar as Republican Donald Trump was elected back to the White House after one of the tightest presidential races in years.

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Bullion tumbled as much as 1.5% as Trump’s victory rippled through global markets, with Treasury yields jumping and the dollar strengthening the most since 2022. A surge in the currency makes bullion pricier for many buyers.

Trump clinched victory after taking key battleground states, while Republicans also gained control of the Senate. A less clear or contested result might have buoyed gold, whereas the decisive win reduces short-term risk for investors. Analysts still see a bullish impact in the long run, fueled by US inflationary pressures and currency weakness in China in the face of possible trade tariffs.

“While a stronger US dollar and higher yields in a Trump win may be headwinds for gold, this will be balanced with potential safe-haven demand in the event of any trade tensions,” said Jun Rong Yeap, a market strategist with IG Asia Pte.

Trumps’ policies are likely to bloat the federal deficit — and the resulting inflationary risk could boost gold’s appeal as a hedge against rising prices.

If it’s a Republican sweep, including not only the Senate but the House of Representatives, “Trump’s ability to increase US government debt and push the deficit up is much greater,” said Marcus Garvey, head of commodities strategy at Macquarie Group Ltd. That would be the “most impactful thing for gold over the next few years.”

The metal has surged more than 30% this year in a record-setting run that’s been powered by heightened geopolitical and economic risks, driving purchases by central banks and consumers alike. The rally intensified in recent months as the Federal Reserve pivoted to interest-rate cuts and the US election loomed.

Spot gold fell 1.3% to $2,707.70 an ounce as of 11:45 a.m. in London. The Bloomberg Dollar Spot Index climbed 1.6%. Silver (SI=F), platinum (PL=F) and palladium (PA=F) all retreated.

The election has overshadowed the Fed’s rate decision due Thursday. A 25-basis-point cut has already been priced in and is unlikely to affect bullion, Commerzbank AG analyst Carsten Fritsch said in a note.

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