Gold Price News: Fluctuations around USD 2,700 after Fed rate cut and US elections

The gold price stabilized slightly today at around the USD 2,700 mark, after the US Federal Reserve cut the key interest rate by 25 basis points on Thursday. The Fed's decision to ease monetary policy had a short-term positive effect on the gold price, which came under pressure during the day due to a strong US dollar and increased bond yields. Fed Chairman Jerome Powell indicated that the central bank would proceed cautiously with further interest rate cuts in December, which contributes to the ongoing uncertainty about future price developments.

Although analysts viewed Trump's election victory as a potential price driver for gold before the US election, the market reacted unexpectedly instead. The relative stability of the US election and the resurgent stock markets led to a temporary decline in the need for hedging, which particularly weighed on the prices of gold and silver. Silver recorded a decline of 1.72 per cent to USD 31.52 this morning, while platinum and palladium also suffered slight losses. Deutsche Bank analysts attribute the decline to the strengthened US dollar and bond yields, which are currently at 4.5 per cent for ten-year US Treasuries.

Despite the volatility, gold ETCs continue to see positive capital inflows. Strong demand for precious metals exchange-traded products – particularly Xetra-Gold and WisdomTree – shows that investors are sticking to gold as a safe asset class in the face of uncertain macroeconomic and geopolitical developments. According to Mobeen Tahir of WisdomTree, the volume of global commodity ETCs continued to rise in October 2024, with precious metals accounting for over 80 percent of the total market.

Commodity markets are currently showing widespread price declines. Brent oil fell by 1.42 percent to USD 74.50, while WTI oil fell by 1.55 percent to USD 71.08. These price movements are due to the cut in OPEC+ production and subdued demand. Other commodities such as cotton, oats and soybean oil are also trading lower. The weakening in the commodities sector reflects ongoing uncertainty about global economic growth and the possible effects of the Fed's interest rate policy.

Barrick Gold and other precious metals producers such as Pan American Silver and Newmont Corp. continued to correct lower. Barrick Gold's recently released quarterly figures showed an increase in revenues, but also higher production costs and lower production volumes. The gold producer posted a profit of USD 483 million, with higher realized selling prices partially offsetting cost increases. The stock was last down 1.76 percent, illustrating the pressure on the sector.

From a chartist perspective, the gold price is currently showing an important support zone at USD 2,600, which serves as a point of reference for investors. However, the resistance at USD 2,700 could pose a barrier to short-term gains. Should the gold price break through this resistance, it could be a signal of a more sustained recovery. Analysts predict a long-term target of USD 3,000, provided that geopolitical tensions continue to escalate and the Fed maintains its monetary policy course.

With the Fed lowering interest rates, ongoing geopolitical tensions and an unclear economic outlook in the US, the gold market remains in a volatile environment. Trump's victory has dampened interest in safe-haven assets in the short term, but longer-term uncertainties could drive demand for gold as a store of value again. Analysts recommend that investors follow developments in the precious metals markets closely, as the current market situation offers a variety of opportunities and risks.