Gold tumbles: Largest weekly drop in 3 years amid Fed moves
Gold prices recorded the most significant weekly decline in over three years. According to Reuters, the decrease was due to diminishing expectations for further interest rate cuts by the Federal Reserve in the US, which strengthened the dollar and reduced gold's attractiveness to investors.
8:34 AM EST, November 17, 2024
The price of gold experienced a slight drop on Friday, reaching $1,750 per ounce. On a weekly basis, however, the decline amounted to over 4%, the lowest level since September 12. Reuters reports that this trend is related to the reduced expectation for interest rate cuts by the Federal Reserve in the US. Consequently, the dollar exchange rate also strengthened.
A drop in gold prices unseen in years
Bloomberg assesses that the increase in the drop in gold prices is also attributed to Donald Trump's victory in the US presidential election. The decline in the metal's value accelerated in the week following the Republican's electoral triumph. Economists point out that current trade policies may contribute to rising inflation, which could affect the US Fed's decisions on interest rates.
Higher interest rates make investments in gold less attractive, as it is a non-interest-bearing asset. Fed Chair Jerome Powell commented on Thursday that the central bank does not plan to lower interest rates in the United States in the near future.
"So far gold has been negatively impacted by the election of Trump but this can change if there is some more uncertainty which could come back in the medium term," said Carlo Alberto De Casa, a market analyst at Kinesis, as quoted by Reuters. The price of silver fell by 0.4% to $22 per ounce during the session on Friday, November 15. The drop in platinum quotations was less noticeable, at 0.1%, to $950.
