HG MARKETS:

Gold prices saw a decline in Asian trading on Friday, struggling to find relief even as the U.S. dollar softened following an interest rate cut by the Federal Reserve. Despite the dollar’s pullback, gold was unable to reverse the downward trend that followed Donald Trump’s victory in the 2024 U.S. presidential election. Markets are still adjusting to the implications of Trump’s return to power, which has sparked significant shifts in both currency and commodity markets. Spot gold dropped 0.4%, trading at $2,695.93 per ounce, while December gold futures edged down 0.1%, to $2,702.80 an ounce. This marks a notable loss for gold, which is now set to finish the week down approximately 1.6%, following a sharp sell-off triggered by Trump’s election win. In the wake of the result, the dollar surged to four-month high, pushing gold prices lower as investors rebalanced their portfolios in response to expectations of more inflationary policies under a Trump presidency. Gold had previously surged to record highs ahead of the election, nearing $2,800 an ounce, amid concerns over economic uncertainty and potential disruptions. However, Trump’s win effectively removed a major source of market uncertainty, prompting a rally in risk-driven assets like stocks, while safe-haven assets like gold suffered. The dollar also benefited from rising Treasury yields as investors priced in the likelihood of inflationary pressures resulting from Trump’s fiscal policies. Despite the ongoing bearish pressure, gold found some short-term relief on Thursday, following the Federal Reserve’s decision to cut interest rates by 25 basis points as expected. In his remarks, Fed Chairman Jerome Powell noted that the U.S. economy remained resilient but also signaled that the central bank was prepared to continue easing monetary policy. While this dovish stance provided some support for gold, investors remain wary of the long-term implications of the rate cuts, especially with the potential for further market volatility under Trump’s leadership. Other precious metals also experienced losses on Friday, with platinum futures slipping 0.6% to $997.85 per ounce, and silver futures falling by 0.1% to $31.82 per ounce. The broader precious metals complex, which had been buoyed by uncertainty surrounding the election, now faces challenges as market sentiment shifts and the dollar strengthens. Meanwhile, industrial metals saw mixed performance, with copper prices retreating on Friday but still poised to finish the week with gains. Copper futures on the London Metal Exchange fell by 0.7%, trading at $9,614 per ton, while December copper futures dropped 0.9% to $4.3970 per pound. The dip came as traders awaited further cues on fiscal stimulus measures from China, the world’s largest copper importer. The National People’s Congress of China, which wrapped up a four-day meeting on Friday, is expected to announce new fiscal spending initiatives aimed at boosting economic growth amid deflationary pressures and a struggling property market. These potential measures could provide some support for copper prices in the weeks ahead. In conclusion, while the Fed’s rate cut provided some short-term relief for gold, the broader market outlook remains uncertain. The ongoing effects of a Trump presidency, combined with a stronger dollar and rising Treasury yields, continue to weigh on gold and other precious metals. Meanwhile, industrial metals like copper are eyeing potential support from fiscal stimulus measures in China, adding a layer of complexity to the overall commodities landscape. As the global economic and political landscape evolves, market participants will be closely monitoring these developments for further signs of direction.