Summary:
Gold prices stayed near a two-month low, weighed down by a strong dollar and optimism about economic growth under Trump’s second term.
Gold prices stayed nearly a two-month low on Wednesday in the face of a robust dollar, optimism about economic growth under a second Trump administration.
Since the Federal Reserve began cutting short-term rates a few months ago, the 10-year Treasury yield has unexpectedly risen, largely due to anticipated inflationary policies. Following the election results, traders have scaled back expectations of further Fed rate cuts next year, with rates expected to remain above 4% until at least May 2025.
The world's largest gold-backed ETF saw its largest weekly outflow in over two years as investors took profits, leading to a $180 per ounce drop in bullion from its peak earlier this month. Many had turned to gold last month amid concerns the election could be contested, though Trump ultimately secured all key battleground states.
In other developments, Trump spoke with Putin last Thursday, urging caution in Ukraine. This was their first conversation since Trump’s election win, according to sources familiar with the exchange.
Gold dipped below 50 SMA without much difficulty – an ominous sign of further pains ahead. The head and shoulders top pattern suggests the price could inevitably slide towards 2,550.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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