Gold Plunged As Trump Victory Boost Dollar

Fundamental Analysis

* Trump Triumph: Gold prices have plunged following Donald Trump’s win in the 2024 presidential election, which has driven both the dollar and Treasury yields higher. Treasury yields surged on expectations that a second Trump administration may introduce policies, like tariffs, likely to spur inflation, potentially prompting the Fed to slow its rate-cutting pace. The Republicans have also secured a majority in the Senate and are on course to win the House of Representatives, suggesting a possible Republican sweep in 2024. This scenario would simplify Trump’s ability to pass major policy changes, many of which could be inflationary, potentially keeping interest rates elevated in the long term and supporting the dollar.

Technical Analysis

* Technical Breakout: Gold price was traded lower following prior breakout below the previous support level 2675.00. MACD which illustrate strong bearish signal suggest the commodity to likely further its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 2625.00. Conversely, a potential reversal is also to be expected and the price could head back towards 2675.00.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

With the elections concluded, investors are shifting their focus back to the U.S. economic agenda, which includes Thursday’s Federal Reserve (Fed) policy decision. The central bank is anticipated to cut interest rates by 25 basis points, setting them within the 4.50%-4.75% range.

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Monitoring

Stay updated on US data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.