Gold Falls to Multi-Week Low as USD Rises with Trump’s Election Lead
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Gold prices fell sharply on Wednesday, nearing the $2,700 mark as early results from the U.S. presidential election favor Donald Trump, sparking a surge in the US Dollar and risk-on sentiment. Increased U.S. bond yields and the potential for inflation-inducing policies under a Trump administration contributed to the XAU/USD decline. Immediate technical support for Gold rests near $2,690, with resistance emerging around $2,750.
Gold Price Update: USD Strength on Trump’s Lead Drags Gold to Multi-Week Low
Gold prices faced heavy selling pressure on Wednesday as early U.S. election results showed Donald Trump leading, prompting a renewed surge in “Trump trades” that favored the US Dollar and risk assets over safe-havens like Gold. Currently trading around $2,700, XAU/USD has reached its lowest point in three weeks, facing considerable downward pressure as election-related uncertainty eases.
Trump’s Election Lead Sparks USD Rally, Impacting Gold Demand
The early election exit polls report a Trump lead, with projections giving him the swing states of North Carolina, Pennsylvania, and Michigan. A Republican Senate majority, called by Fox News, adds to the momentum for U.S. economic measures that could favor the dollar. Investors are eyeing Trump’s pledge for high tariffs and fiscal spending, which could drive U.S. inflation and bond yields higher, reducing the appeal of non-yielding assets like Gold.
In fact, 10-year U.S. Treasury yields spiked by nearly 15 basis points to 4.44%, their highest level since July, as speculation grew over Trump’s potential economic policies. The sharp rise in yields underscored the risk-on sentiment that weighed heavily on the Gold market, with investors favoring the USD as the currency climbed to a four-month high.
Technical Outlook: Key Support and Resistance Levels for XAU/USD
Gold’s recent technical landscape reflects this bearish shift. After falling below the support zone at $2,725-$2,720, XAU/USD appears headed for further downside, with the next significant support level around $2,690, the lower boundary of a short-term ascending trend channel formed since late July. A clear break below this channel could extend Gold’s pullback towards $2,675 and possibly the $2,655 region.
On the upside, immediate resistance lies at the $2,748-$2,750 level. Should Gold break past this point, it could target the upper boundary of the ascending channel near $2,780-$2,785. Further gains could lead XAU/USD to test the psychologically significant $2,800 mark, which would be a pivotal level for re-establishing a bullish outlook.
Daily Digest: Key Market Drivers for Gold
U.S. Dollar Surge: USD gains have reached a four-month peak, weighing on the XAU/USD pair. Bond Yields Climb: The 10-year yield’s intraday surge reflects heightened expectations of Trump’s pro-growth policies. Risk-On Sentiment: As political uncertainty fades, investors shift focus to equities, undermining Gold’s safe-haven appeal.
Geopolitical Tensions: Despite lingering concerns over Iran and Israel, Gold’s reaction remains muted, with the USD dominating as the key driver. Outlook and Key Takeaways
The election results mark a crucial turning point for the financial markets, and Gold could face continued downside if the USD rally remains unabated. Traders should monitor U.S. bond yields closely and assess the possibility of additional tariffs and fiscal spending under a Trump administration, which could further shape Gold’s direction in the short term.
Gold Price Update: USD Strength on Trump’s Lead Drags Gold to Multi-Week Low
Gold prices faced heavy selling pressure on Wednesday as early U.S. election results showed Donald Trump leading, prompting a renewed surge in “Trump trades” that favored the US Dollar and risk assets over safe-havens like Gold. Currently trading around $2,700, XAU/USD has reached its lowest point in three weeks, facing considerable downward pressure as election-related uncertainty eases.
Trump’s Election Lead Sparks USD Rally, Impacting Gold Demand
The early election exit polls report a Trump lead, with projections giving him the swing states of North Carolina, Pennsylvania, and Michigan. A Republican Senate majority, called by Fox News, adds to the momentum for U.S. economic measures that could favor the dollar. Investors are eyeing Trump’s pledge for high tariffs and fiscal spending, which could drive U.S. inflation and bond yields higher, reducing the appeal of non-yielding assets like Gold.
In fact, 10-year U.S. Treasury yields spiked by nearly 15 basis points to 4.44%, their highest level since July, as speculation grew over Trump’s potential economic policies. The sharp rise in yields underscored the risk-on sentiment that weighed heavily on the Gold market, with investors favoring the USD as the currency climbed to a four-month high.
Technical Outlook: Key Support and Resistance Levels for XAU/USD
Gold’s recent technical landscape reflects this bearish shift. After falling below the support zone at $2,725-$2,720, XAU/USD appears headed for further downside, with the next significant support level around $2,690, the lower boundary of a short-term ascending trend channel formed since late July. A clear break below this channel could extend Gold’s pullback towards $2,675 and possibly the $2,655 region.
On the upside, immediate resistance lies at the $2,748-$2,750 level. Should Gold break past this point, it could target the upper boundary of the ascending channel near $2,780-$2,785. Further gains could lead XAU/USD to test the psychologically significant $2,800 mark, which would be a pivotal level for re-establishing a bullish outlook.
Daily Digest: Key Market Drivers for Gold
U.S. Dollar Surge: USD gains have reached a four-month peak, weighing on the XAU/USD pair. Bond Yields Climb: The 10-year yield’s intraday surge reflects heightened expectations of Trump’s pro-growth policies. Risk-On Sentiment: As political uncertainty fades, investors shift focus to equities, undermining Gold’s safe-haven appeal.
Geopolitical Tensions: Despite lingering concerns over Iran and Israel, Gold’s reaction remains muted, with the USD dominating as the key driver. Outlook and Key Takeaways
The election results mark a crucial turning point for the financial markets, and Gold could face continued downside if the USD rally remains unabated. Traders should monitor U.S. bond yields closely and assess the possibility of additional tariffs and fiscal spending under a Trump administration, which could further shape Gold’s direction in the short term.