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Gold prices fell on Friday (Nov 8), signaling the potential for a second consecutive weekly decline as traders assessed the impact of Donald Trump’s presidential election win on U.S. interest rates.
According to Reuters, spot gold prices fell 0.7% to $2,687.65 per troy ounce at 06:45 GMT, marking a nearly 2% drop for the week. Prices hit a three-week low on Wednesday after Trump’s win but rebounded over 1% the following day. Meanwhile, U.S. gold futures fell 0.4% to $2,694.50 per troy ounce.
The U.S. dollar index registered a slight weekly increase after Trump’s victory. A stronger dollar makes gold more expensive for buyers outside the U.S.
"The gold market is waiting for a catalyst for liquidation. There is uncertainty surrounding the direction of U.S. rate cuts, which has contributed to this decline in gold prices," said Soni Kumari, a commodities analyst at ANZ.
The Federal Reserve cut interest rates by 25 basis points on Thursday, as expected, but indicated a cautious approach toward further reductions. Fed Chair Jerome Powell stated that the election outcome would not have a short-term impact on monetary policy.
Traders currently see a 71% chance of another 25-basis-point cut in December. Gold is viewed as a hedge against inflation, but higher interest rates raise the opportunity cost of holding the commodity.
"During Trump’s first term, gold prices rose, and his policies don’t seem likely to change significantly," noted Hugo Pascal, a precious metals trader at InProved. "Running higher deficits and implementing tariffs are inflationary moves, which should be positive for gold."
Elsewhere, Beijing concluded a five-day meeting of the Standing Committee of the National People’s Congress, where investors expect more details on stimulus measures.
Spot silver prices dropped 1.39% to $31.55 per troy ounce, platinum fell 0.95% to $987.75, and palladium slipped 1.51% to $1,009.00.
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