Gold prices extended their losses on Monday, following a sharp decline last week. The precious metal was pressured by a stronger US dollar and a healthy risk appetite in the wake of former President Donald Trump’s victory in the 2024 election, which reduced market uncertainty and diminished gold’s appeal as a safe-haven asset.
Key Highlights:
- Gold’s Decline: As of 3:00 p.m. ET, spot gold was down 2.4% at $2,619.89 per ounce, and gold futures fell 2.5% to $2,626.45 per ounce. The drop follows a week of losses, with a significant pullback from recent record highs.
- Impact of Trump’s Election Victory: Trump’s win has cleared a major point of uncertainty, reducing gold’s appeal. His expected expansionary policies and a potential increase in inflation are seen as bullish for the US dollar, further weighing on gold prices.
- Fed’s Cautious Stance: The Federal Reserve cut interest rates by 25 basis points last week but indicated a cautious approach to further easing. This has led to a stronger dollar, which negatively impacts gold, as it is priced in dollars.
- Focus on US Inflation Data: The market’s attention now turns to the October Consumer Price Index (CPI) report, due this week. The data will provide further insight into inflation trends and whether they are cooling in line with the Fed’s expectations. A series of speeches from Fed officials will also offer additional guidance on future monetary policy.
- Other Precious Metals: On Monday, other precious metals were mixed. Platinum futures fell 1.1% to $968.20 per ounce, while silver futures dropped 2.2% to $30.747 per ounce.
- Copper Weakens: Meanwhile, copper prices weakened amid a disappointing China stimulus plan that failed to meet expectations for stimulating demand, particularly in the world’s largest consumer of copper.
Outlook: With the focus shifting to inflation data and Fed policy cues, gold prices may face further downward pressure, especially if the dollar continues to strengthen.
