U.S. election day pushes gold down to $2,700 following gains in the dollar and Treasury yields
Gold prices dip 1.5% to $2,700/oz on election day amidst dollar spike and rising Treasury yields
Gold prices slipped 1.5% to $2,700 per ounce on election day, a drop from $2,750 after three days of trading within a narrow range. The U.S. dollar’s spike and rising Treasury yields, as early voting results came in, added pressure on gold. Despite this dip, analysts maintain that the election outcome is unlikely to derail gold’s broader rally.
As initial results from the U.S. presidential election filtered in, showing Donald Trump pulling ahead in key battleground states, the dollar surged to a near four-month high. Gold, priced in dollars, faced a natural headwind, causing its recent pullback. Early voting numbers have Trump leading with 230 electoral votes to Kamala Harris’s 192, with the Associated Press reporting Trump’s wins in battleground states like North Carolina. Despite this currency-driven setback, many view the price dip as a temporary response.
Key drivers for gold’s rally still intact
Looking beyond the immediate election reaction, factors supporting gold’s upward trend remain strong. Analysts at Goldman Sachs and ING are forecasting gold to potentially reach $3,000 per ounce by the end of 2025. Declining interest rates, combined with central bank gold purchases, have set the stage for this rally, creating what ING calls a “perfect storm for gold.” The recent rate cut by the Federal Reserve in September, coupled with another cut expected this week, has only reinforced investor interest in gold, a non-yielding asset that benefits from lower rates.
Central banks continue to diversify their reserves, with recent data showing a record-breaking year for gold purchases and plans to increase their gold holdings this year. This robust institutional demand, alongside concerns about geopolitical tensions and ballooning U.S. debt, adds to gold’s safe-haven appeal for investors cautious about the uncertain economic landscape. While election-day volatility has nudged gold lower, analysts remain confident in gold’s upward trajectory, regardless of the election’s final outcome.
U.S. elections and Fed rate decisions keep gold prices steady at nearly $2,730. The precious metal has managed to stabilize around $2,736.61 an ounce in early Asian trade
