Gold prices dipped slightly in Asian trade on Thursday following Donald Trump’s win in the 2024 elections, leading to a surge in the dollar and risk assets. The precious metal has also faced profit-taking after hitting record highs before the elections, but it still maintains gains from the previous month.
Spot gold fell to $2,658.03 an ounce, while gold futures for December dropped 0.4% to $2,664.70 an ounce.
Impact of Trump’s Victory on Gold Prices
Gold prices plummeted more than 3% on Wednesday as the dollar soared to four-month highs post Trump’s win. The resolution of the election uncertainty triggered a risk-on sentiment in global markets, leading to a decline in safe-haven assets like gold.
However, gold found support on Thursday amidst lingering uncertainty around Trump’s cabinet appointments and the potential for an escalating trade war with China. The president-elect’s inflationary policies could boost interest rates, putting pressure on non-yielding assets like gold.
The conclusion of the Federal Reserve meeting later in the day was also a focus, with expectations of policy signals in light of future rate cuts and inflation concerns under a Trump administration.
Copper Prices Rise on Steady China Imports
Copper prices saw an uptick on Thursday as China’s copper imports remained stable in October, easing fears of economic headwinds from Trump’s presidency. China’s import of unwrought copper and copper products in October was up 1.1% year-on-year, providing support to copper prices.
Benchmark copper on the London Metal Exchange climbed 1.3% to $9,444.50 a ton, while December copper rose 1.4% to $4.2980 a pound, recovering from previous losses.
China’s position as the largest copper importer globally has been a key factor influencing copper prices, with concerns over demand levels in the country impacting market sentiment.
Analysis and Breakdown
Overall, Trump’s victory has had a mixed impact on the precious metals market, with gold facing selling pressure but finding some support in the face of ongoing uncertainties. The dollar rally and risk-on sentiment following the election have driven gold prices lower, while copper has benefited from steady import data from China.
Investors should keep an eye on Trump’s policy decisions, particularly regarding trade relations with China and inflationary measures, as these factors could continue to influence the performance of gold and copper in the coming days. Understanding the dynamics of the market and staying informed about global events will be crucial for making informed investment decisions in the current climate.