07 Nov 2024

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Gold prices have declined as the US Dollar reached a four-month peak, influenced by trading activities related to Trump.

Precious metals are experiencing downward pressure as safe-haven demand diminishes amid increasing market optimism.

The non-yielding XAU/USD is encountering difficulties as US Treasury yields hover near their highest levels since July.

Daily Digest Market Movers: Gold price struggles due to market optimism, Trump trades

Gold, which does not yield interest, experienced downward pressure as US Treasury yields reached their highest levels since July on Wednesday. The yields for the 2-year and 10-year US Treasury bonds increased to 4.31% and 4.47%, respectively.

The price of gold may find support due to the potential for higher inflation stemming from Republican Donald Trump's commitment to significantly raise trade tariffs. This situation could lead investors to pursue safe-haven assets as a safeguard against long-term inflationary risks.

Trump's economic strategy involves implementing tariffs, increasing the fiscal deficit, and lowering taxes. These initiatives are at odds with the Federal Reserve's attempts to manage inflation, which may result in the central bank adopting a more cautious stance regarding the easing of monetary policy.

The decline in the safe-haven asset XAU/USD appears to be largely unaffected by concerns surrounding Iran's intentions for a retaliatory strike in response to Israel's actions on October 26.

On Tuesday, the US ISM Services Purchasing Managers Index rose to 56.0 in October, an increase from 54.9 in September, surpassing the anticipated figure of 53.8. Conversely, the S&P Global Services PMI recorded a value of 55.0 in October, slightly lower than the previous reading and the expected 55.3.