Oil and gold prices both saw a decline following Donald Trump’s announcement of victory in the US presidential election. Gold prices dropped to nearly a three-week low as the dollar gained strength after Trump’s win. Investors are now looking to the Federal Reserve’s upcoming meeting for insights into future monetary policy. Spot gold fell by 0.8 percent to $2,721.21 per ounce, down from a record high reached last Thursday.
The strengthening dollar also contributed to a drop in oil prices, with Brent crude futures falling by $1.25 to $74.28 per barrel and US West Texas Intermediate (WTI) crude declining by $1.25 to $70.74 per barrel. The US dollar hit a four-month high, making oil more expensive for buyers holding other currencies. The dollar is on track to register its largest daily gain against major counterparts since March 2020.
Data from the American Petroleum Institute (API) showed that US crude oil inventories rose by 3.13 million barrels in the week ending 1 November 2024, surpassing an expected increase of 1.1 million barrels. Oil and gas producers in the US Gulf of Mexico have also started shutting down production as Tropical Storm Rafael is forecasted to intensify into a Category 1 hurricane.
Gold, which is traditionally viewed as a hedge against inflation, becomes less attractive when interest rates rise, as it offers no yield. With the strengthening dollar and the potential impact of future monetary policy decisions, investors are closely monitoring the precious metal market for potential fluctuations. The drop in gold prices following Trump’s victory reflects the uncertainty and volatility in global markets.
Overall, the impact of Trump’s victory on global markets, particularly on oil and gold prices, highlights the interconnected nature of the financial world. With factors such as the strengthening dollar, potential changes in monetary policy, and external events like Tropical Storm Rafael influencing prices, investors must stay informed and adapt to the ever-changing landscape of the commodities market.
