A Trump victory sparks a sharp rally in the U.S. dollar. In recent trading sessions, speculation that a Trump presidency could drive higher inflation—thanks to his promise to significantly raise trade tariffs—has prompted investors to turn to gold as a hedge against long-term inflation risks. At the same time, attention this week is focused on the Federal Reserve's monetary policy decision on Thursday, with markets widely anticipating a quarter-point rate cut. Such a move is viewed as favorable for gold, as lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Gold price hammered down to multi-week low

The U.S. will hold its presidential election on Tuesday, and polls show a tight race between the Democratic candidate, Vice President Kamala Harris, and the Republican candidate, former President Donald Trump.

Also in focus this week is the Federal Reserve's interest rate decision on Thursday, with markets widely expecting a 25 basis point rate cut. Gold is often viewed as a hedge against economic and political uncertainty and tends to perform better in low-interest environments.

Increasing uncertainty surrounding the upcoming U.S. election.

Japanese voters will head to the polls on Sunday for the national election. Polls indicate that the ruling Liberal Democratic Party (LDP) may lose its dominant position, which has been maintained for over a decade.

This could complicate the Bank of Japan's (BOJ) monetary policy plans.

The BOJ is expected to hold a meeting next week and may maintain ultra-low interest rates, while also potentially signaling a less dovish policy stance due to easing concerns about a U.S. economic recession and the need to prevent speculators from excessively pushing down the yen.

The core inflation rate in Tokyo fell below the BOJ's 2% target for the first time in October

Gold is seen as a hedge against political and economic uncertainty, having risen over 31% this year and repeatedly setting historic highs. This surge is attributed to the Federal Reserve's interest rate cuts last month and safe-haven demand creating a perfect storm for precious metals.

Gold prices dropped over 1% after reaching historic highs

Technical Analysis: From the daily perspective, on October 16th, a key long bearish candle appeared due to UK inflation data falling short of expectations, breaking below the support zone of 1.3020–1.3045, which shifted the short-term trend to a bearish stance. On the hourly chart, downward momentum began to strengthen at 2:00 PM Beijing time. Given the bearish trend, there is a possibility for prices to further decline toward recent lows in the short term

Johnny Lee

Johnny Lee

2024年11月6日

Gold price hammered down to multi-week low

Johnny Lee

2024年11月5日

Increasing uncertainty surrounding the upcoming U.S. election.

Johnny Lee

2024年10月28日

The core inflation rate in Tokyo fell below the BOJ's 2% target for the first time in October

Johnny Lee

2024年10月24日

Gold prices dropped over 1% after reaching historic highs

Johnny Lee

2024年10月21日

Bearish candle appeared due to UK inflation