Gold Prices Plunge 3% to $2650 per Ounce After Trump’s Victory: What’s Next?
Gold prices have taken a hit, dropping over 3% to $2650 per troy ounce following Donald Trump’s win in the US presidential election. The surge in the US dollar has put pressure on gold, with prices holding near three-week lows. Investors are now expecting a more conservative approach from the Federal Reserve on interest rate cuts, as Trump’s victory is seen as pro-inflation. This could lead to higher lending rates to combat potential inflation spikes, reducing the appeal of non-yielding assets like gold.
All eyes are on the Fed’s interest rate decision today, with a 25-basis-point cut anticipated. This has already been factored into the market and is impacting current gold prices. The future movements of gold will depend heavily on the Fed’s commentary and subsequent rate decisions. While rate cuts are expected, the timing and extent of these cuts will be crucial for gold’s attractiveness.
Technical Analysis of Gold:
Gold recently hit a peak of 2790.00 before entering a consolidation phase below this level. The downward breakout has paved the way for a significant correction, with the MACD indicator pointing towards further declines. The immediate downside target is 2617.40, with potential for further losses to 2575.75 if the bearish trend continues. The hourly chart suggests a developing downward wave towards 2635.65, with a possible corrective rally to 2683.11 before further declines.
In conclusion, the current market dynamics indicate a bearish outlook for gold prices in the short term. Investors should closely monitor the Fed’s interest rate decisions and commentary for clues on future movements in the gold market. It is crucial to stay informed and adapt investment strategies accordingly to navigate the volatility ahead.