Gold Sees Biggest Weekly Dip in More Than 5 Months

Gold prices saw a steep decline last week amid the election of a new American president, a strengthening dollar, and the U.S. Federal Reserve’s interest rate cuts.
Gold prices surged on Thursday following the Fed announcement. However, much of the gains were lost in the subsequent trading days.
On Nov. 11, spot gold was trading down at around the $2,673 level, as of 5:20 a.m. EST.
“Trump’s proposed policies, including tariffs and stricter immigration controls, which are inflationary in nature, could limit interest rate cuts from the Fed. A stronger dollar and tighter monetary policy could provide headwinds to gold and industrial metals,” it said.
“Continued gold ETF buying may have come as a surprise to many as yields rose and the dollar strengthened, leaving investors re-thinking the future interest rate path amid robust U.S. economic performance,” the WGC said.
“Demand for gold was helped by uncertainty surrounding the U.S. presidential election. And the military escalation in the Middle East conflict, along with rumors that North Korea could join the Russian front against Ukraine, may have contributed to rising gold ETF demand.”
The central bank’s purchase of physical gold could continue until this threshold is reached, it noted. If the price breaks above $3,000, the bullion may well hit a target of $3,113. In the case that the bull market is strong and upside levels are surpassed, $4,000 could potentially become a new target, the bank said.
“Since 1971, there have been seven bull markets in gold with a medium length of 199 weeks and an average return of 250 percent. The longest one lasted for 445 weeks, and gold prices rallied 294 percent during this time. The shortest bull market lasted for 33 weeks, with gold prices rising 65 percent,” it said.
“On the other hand, the best return was seen in the 1970s, at 701 percent, when the bull market lasted for 177 weeks. Currently, the bull market has lasted for 105 weeks and returned 64 percent thus far, which is well below average. History suggests gold has more room to run.”