Gold's gleam dims: Record weekly plunge hits three-year low
Gold prices have seen the most significant weekly decline in over three years. According to Reuters, the decrease is attributed to dampened expectations for further interest rate cuts by the Federal Reserve in the US, which has strengthened the dollar and diminished gold's appeal to investors.
17 November 2024 14:01
The price of gold dropped slightly on Friday, reaching approximately €1,660 per ounce. However, on a weekly basis, it fell by over 4%, marking the lowest level reached since 12 September. Reuters notes that this trend is associated with waning expectations for interest rate cuts by the Federal Reserve in the US, which has, in turn, bolstered the dollar's exchange rate.
A drop in gold prices unseen in years
Bloomberg points out that the increased decline in gold prices is also linked to Donald Trump's victory in the US presidential election. The dip in the metal's value accelerated in the week following the Republican's electoral success. Economists highlight that current trade policies may lead to rising inflation, which could influence the US Federal Reserve's decisions on interest rates.
Higher interest rates render gold investments less appealing, as gold does not generate interest. Fed Chair Jerome Powell stated on Thursday that the central bank does not plan to lower interest rates in the United States shortly.
"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," commented Carlo Alberto De Casa, a market analyst at Kinesis, as quoted by Reuters. The price of silver fell by 0.4% to approximately €14,6 per ounce during the session on Friday, 15 November. In contrast, the drop in platinum quotations was less pronounced, declining by 0.1% to around €628.
