Wed Nov 13 06:27:16 UTC 2024: ## Gold Prices Plunge After Trump Win, US Economic Data in Focus

**MUMBAI, INDIA** – The price of gold has taken a sharp tumble in global and domestic markets following Donald Trump’s victory in the US presidential election. The strengthening US dollar and rising bond yields, spurred by investor confidence in Trump’s economic policies, have put downward pressure on the precious metal.

Spot gold, the benchmark price for the metal, was trading down 0.6% at $2,604 per ounce on Tuesday, marking a decline of nearly $150 since the election on November 5th. The Indian gold futures market has also seen significant losses, with December contracts shedding over Rs 4,200 from their November 5th peak.

Market analysts are now closely watching key US economic data releases this week, including the consumer price index (CPI), producer price index (PPI), retail sales, and index of industrial production. These reports will provide crucial insights into the US economy’s health and could influence the Federal Reserve’s decision on interest rate cuts.

A decline in inflation and economic output could lead to a faster pace of rate cuts, boosting demand for gold, which tends to perform well in low-interest rate environments. However, a higher-than-expected inflation reading could diminish the likelihood of a rate cut in December and further depress gold prices.

“We recommend a ‘sell on rise’ strategy for those aiming to capitalize on short-term gains,” said Rahul Kalantri, vice president for commodities at Mehta Equities Ltd.

While the Federal Reserve chair, Jerome Powell, has neither ruled out nor confirmed a rate cut in December, markets are now pricing in less than a one-percentage-point reduction by the end of next year.

“Rising inflation expectations, coupled with a growing fiscal deficit if these policies are implemented, suggest that US bond yields may remain elevated, which could weigh on non-yielding assets like gold,” said Kaynat Chainwala, assistant vice president for commodities research at Kotak Securities Ltd.

The underwhelming fiscal stimulus announced by China is also expected to continue weighing on gold prices.

Despite the current downward trend, geopolitical tensions could still drive gold prices higher. The overall outlook for gold remains negative, with analysts predicting potential declines to the $2,580 and $2,540 levels for spot gold.

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