Gold prices have declined, extending a short-term bearish trend. This decline is primarily attributed to expectations of higher interest rates due to the recent election results and economic indicators like the Michigan Consumer Sentiment Survey.
Key Factors Influencing Gold Prices:
- Rising Interest Rate Expectations: Higher interest rates can negatively impact non-interest-bearing assets like gold.
- Post-Election Market Sentiment: The market’s positive reaction to the election results, particularly regarding potential economic stimulus and deregulation, has reduced demand for safe-haven assets like gold.
- Fed’s Rate Cut and Forward Guidance: While the Fed’s recent rate cut was positive for gold, the absence of a more dovish tone and the expectation of future rate hikes have limited gold’s upside.
Technical Analysis:
- Short-Term Downtrend: Gold is currently in a short-term downtrend, and a break below the $2,643 level could confirm further downside.
- Long-Term Uptrend: However, the long-term uptrend remains intact. A reversal to the upside is still possible, especially if there are renewed concerns about economic uncertainty or geopolitical tensions.
