Wed Nov 06 23:37:36 UTC 2024: ## Gold Plunges as Trump Victory Boosts Dollar and Rates
**New York, November 6, 2024** – Gold prices plummeted today as the US Dollar Index and US Treasury yields surged following Donald Trump’s apparent election victory. The Dollar Index, a measure of the greenback’s value against a basket of other currencies, jumped by 1.7% to levels not seen since July. The US 10-year Treasury yield also climbed to its highest point since July, reflecting increased investor confidence in the US economy under Trump’s leadership.
The market is anticipating a scenario of higher interest rates for a longer period, making gold, which does not offer interest payments, less appealing. Additionally, renewed optimism about Trump’s potential to secure a peace deal in the Middle East further dampened gold’s allure.
Prior to the election, markets were predicting a 77% probability of a 25 basis point interest rate cut in December by the Federal Reserve. However, post-election, this probability has dropped to 66% and is expected to decline further if Republicans secure control of the House of Representatives.
While the immediate impact of a Trump victory has been felt on gold, its future trajectory remains uncertain. The President-elect will only take office in January, leaving room for any potential optimism surrounding peace deals and higher interest rates to fade.
The Federal Reserve’s meeting tomorrow is unlikely to have a major impact on markets, as the Fed’s outlook may be subject to change in the new year. Trump’s policies, particularly regarding tariffs and inflation, could potentially affect the Fed’s future direction.
Technically, gold has been signaling a decline since mid-October. The recent sell-off has pushed gold below its long-term ascending trendline for the first time since August, potentially opening the door for further downward movement.
Although a brief retracement is possible, analysts believe the momentum favors further declines towards key support levels in the coming days.
First Piper 