Gold prices rose on Friday, the last trading day of November 2024, helped by a falling dollar and ongoing geopolitical tensions. However, the yellow metal ends the last month of autumn with its most significant price drop since September last year after a sell-off triggered by Donald Trump’s victory in the US presidential election.
Gold has fallen 3% since the start of the month, its biggest monthly drop since September 2023, as Trump’s “euphoria” drove the dollar higher earlier this month and halted gold’s rise, triggering a post-election sell-off.
The dollar index fell to its lowest level in a fortnight but was up 2% at the end of November as Trump’s victory on November 5 heightened expectations of big budget spending, higher duties and tougher immigration policies.
Gold, which rallied on geopolitical tensions and Federal Reserve interest rate cuts this year, now faces pressure as Trump’s higher duties could spark inflation and make the Fed lean towards a more cautious approach to further rate cuts.
Jim Wyckoff, senior market analyst at Kitco Metals, said it is currently unknown how Trump’s promised duties will be implemented. However, the uncertainty of the issue, tariffs that could trigger a slowdown in economic growth could actually be beneficial to the gold market in terms of its safe haven asset status.
The yellow metal has traditionally been an attractive investment during periods of economic and geopolitical uncertainty, and it tends to become more interesting to investors in a low interest rate environment.
Ole Hansen, head of commodity strategy at Saxo Bank, said:
“Continued global uncertainty continues to drive demand for gold as a safe haven asset.”
