On November 6, 2024, the U.S. dollar surged to a four-month high following the election of Donald Trump as President of the United States. This development caused significant market shifts, particularly impacting gold and other commodities.
Gold prices fell over 3%, reaching a three-week low at $2,652.19 per ounce, as investors shifted their focus to the strengthening dollar. Spot gold was recorded at $2,662.99 per ounce, marking its largest daily loss in five months. U.S. gold futures also dropped by 3% to $2,668.20.
The dollar index's rise made gold more expensive for international buyers, prompting analysts to predict a potential pause in the Federal Reserve's easing cycle if inflation pressures mount. The Fed is widely expected to announce a 25 basis point rate cut during its meeting on November 7.
In addition to gold, other precious metals like silver, platinum, and palladium also saw declines, with silver dropping 4.9% to $31.03 per ounce, and platinum and palladium hitting three-week lows.
The market is reacting to expectations that Trump's presidency will lead to increased tariffs, which could further influence inflation and interest rates in the U.S. This scenario raises concerns about the Fed's future monetary policy direction.