Gold Prices Today: Steepest Weekly Decline in Five Months After Trump’s Election Win

Gold prices experienced a significant drop on Friday, November 8, positioning the yellow metal for its sharpest weekly decline in over five months. Spot gold fell by 0.6% to $2,690.62, marking a 1.6% decrease for the week. US gold futures also slipped, shedding 0.3% to close at $2,697.90. This decline was primarily driven by the US dollar’s strength and shifting market sentiments following Donald Trump’s 2024 presidential election victory, which could potentially impact US Federal Reserve rate policies.

Key Factors Impacting Gold Prices

The stronger US dollar, which rose 0.3% for the week, weighed heavily on gold prices. A robust dollar makes gold more expensive for international buyers, reducing its demand. The market’s reaction to Trump’s election win added another layer of complexity, as investors speculated on potential shifts in economic and trade policies that could influence the Federal Reserve’s approach to interest rates.

While the Federal Reserve recently cut benchmark interest rates by 25 basis points (bps), it signaled caution regarding further cuts. Fed Chair Jerome Powell indicated that the election outcome would not immediately impact monetary policy. However, the uncertainty surrounding potential policy adjustments under Trump’s administration has fueled doubts about aggressive rate reductions moving forward. Higher interest rates typically reduce the appeal of non-yielding assets like gold, as they increase the opportunity cost of holding such investments.

Broader Market Performance

Other precious metals followed a similar trend, with spot silver dropping 1.3% to $31.58 per ounce, platinum falling 1.8% to $979.15, and palladium decreasing 2.3% to $1,001.25. In India, gold futures on the MCX declined by 0.21% to ₹77,249 per 10 grams as domestic markets reflected global trends.

Outlook

While analysts suggest that gold may regain stability if the Fed signals more rate cuts, the current sentiment remains cautious. Physical demand for gold in India has softened, while markets in Japan and Singapore have shown modest buying. Investors will closely watch for any Fed policy changes and Trump’s economic agenda, which could influence gold’s performance in the coming weeks.