Gold Prices Slide to One-Month Low as Dollar Strengthens Post-Trump Election Win
Gold hits a one-month low as the dollar rises post-Trump's election win. Find out how Trump's policies and economic shifts are impacting gold prices.
Gold prices have hit their lowest in a month, largely due to the dollar's ongoing rise since Donald Trump’s election victory. Gold fell another 0.6% after a significant 2.5% drop the previous day, as the dollar surged to a one-year high. This jump is driven by Trump’s proposed tax cuts and trade tariffs, which are making dollar-based commodities like gold more expensive for global buyers.
Gold has now lost about 5% of its value since the election, as investors shift toward U.S. stocks and hedge funds reduce bullish positions on gold. Outflows from gold-focused exchange-traded funds have also impacted demand. According to Chris Weston, Head of Research at Pepperstone Group Ltd., a technical factor also played a role, with gold dropping below its 50-day moving average, prompting some funds to exit long positions.
Still, gold remains up by over 25% this year, buoyed by the Federal Reserve’s rate cuts, central bank demand, and persistent global uncertainties, which have kept safe-haven interest in gold high.
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Looking ahead, investors are focused on Wednesday’s core consumer price index report, which could offer insight into the Fed’s future rate cuts. Trump’s policies could spark inflation, possibly reducing the need for further cuts. Gold tends to benefit from lower borrowing costs, as it doesn’t generate interest.
As of 2:20 p.m. in Singapore, spot gold was down 0.5% at $2,606.45 an ounce, marking a 7% decline from last month’s record high. The Bloomberg Dollar Spot Index gained for a third straight day, while silver, palladium, and platinum also experienced declines.
Also Read: Gold Nears Record Highs: How Investors Can Take Advantage of Rising Prices
