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Gold and bitcoin spent most of 2026 as the market's two worst bets. The morning after the midterm elections, both are rallying while the dollar slips.
Gold futures (GC=F) jumped more than 3% Wednesday, back above $4,000 an ounce, and bitcoin (BTC-USD) rose nearly 4%, back above $80,000. Silver (SI=F) did even better, gaining about 5%.
The dollar index (DX-Y.NYB) slipped alongside the Democratic sweep of Congress. At its low, it was on track for its biggest drop in more than two months before paring the loss.
That's the debasement trade — the bet that big deficits and easy money chip away at the dollar's value, pushing investors into assets the government can't print. It has been missing in action for most of the year.
Through the end of October, bitcoin and gold were the two worst-performing major assets of 2026, a first for any calendar year, Charlie Bilello of Creative Planning found.
The early election-night selling in tech stocks and bitcoin "quickly reversed," Pictet Asset Management chief strategist Luca Paolini wrote in a note. He said assets tied to the Trump agenda, including bitcoin, "had already corrected by roughly 10% from recent highs in the run-up to the election."
The rally also came as Scott Bessent's Treasury reset its own borrowing guidance. On Nov. 4, the Treasury's quarterly refunding statement dropped "at least" from its pledge to keep auction sizes steady, opening the door to changes in how much debt it sells next year.
The Treasury Department's own bond advisers had just told him there was "no evidence that 2026 technology-related issuance has crowded out long-end Treasury demand." Gold and bitcoin buyers are hedging anyway.
Still, the bounce barely dents the damage. Through Tuesday's close, gold futures were about 26% below their Jan. 29 record, bitcoin was 38% below its October 2025 peak, and silver was 57% under its January high.
And this isn't a full-blown run on the dollar. The dollar index is still up nearly 4% this year, and the 10-year Treasury yield (^TNX) slipped to about 4.9%, suggesting bond investors are betting on gridlock rather than a spending spree.
Wells Fargo Investment Institute said gold's jump may reflect "less political certainty in the U.S. going forward, as well as lower inflation-adjusted interest rates."
Next up is December's budget fight in Washington. Wells Fargo is betting the dollar wins the longer game: "A comparatively hawkish Federal Reserve, elevated Treasury yields, and relatively favorable U.S. growth should support modest U.S. dollar appreciation through 2027."
Internal AI tools helped analyze interview transcripts, research, and draft this post. Humans reviewed, edited, and fact-checked this post before publication.
