Gold has faced a decline, dropping nearly 7.0% in November, but for investors, this dip may present a golden opportunity. The market shake-up following Donald Trump’s election and Republican control of Congress has strengthened the U.S. dollar and temporarily sent gold prices tumbling, with XAU/USD slipping to around its 100-day SMA in the US$2,560 range. Yet, these political shifts and economic conditions could set the stage for a bullish outlook on gold.
Trump’s anticipated pro-business policies—aimed at deregulation and fiscal expansion—may boost the dollar in the short term, typically negative for gold. However, the Federal Reserve is widely expected to cut rates by 25 basis points in December. Lower interest rates reduce the appeal of yield-bearing assets, which can reignite interest in gold as an attractive non-yielding alternative.
Additionally, outflows from gold ETFs in North America have hit US$809 million, as hedge funds and some investors pivot to assets like Bitcoin, which has seen an explosive rally to new highs above US$90,000. But such rapid swings in asset allocations often pave the way for gold's re-entry as a stable, long-term haven. Even as traders temporarily rotate out, gold’s strong fundamentals remain intact, and any economic volatility or correction in overinflated assets could shift attention back to the yellow metal.
Despite the drop in China's gold demand, driven by economic deceleration and anticipated U.S.-China trade frictions, gold's role as a geopolitical hedge has hardly lost its shine. Global conflicts may simmer under Trump's renewed foreign policy. Still, any escalations—such as potential tensions stemming from the appointment of hardliner Mike Huckabee as Ambassador to Israel—could revive safe-haven flows to gold.
On the technical front, gold's current dip has brought it to a crucial support level of around US$2,540. A break below this could test US$2,477, but the long-term trend remains upward. Historical patterns show that pullbacks during broader uptrends often signal buying opportunities for investors waiting for entry points, making this recent slip a compelling prospect for gold bulls.
With market volatility, the Fed’s upcoming rate cuts, and geopolitical uncertainties, gold’s near-term weakness may well be a precursor to strength. For those seeking shelter from market storms, this pullback could represent the ideal moment to go long on gold and take advantage of its enduring value.
What is the best way to buy gold and take advantage? Gold Standard Tokens.
Experience the Future of Precious Metals Investment with Gold Standard (AUS) & Silver Standard (AGS):
Available on platforms like Ainslie Crypto, CoinSpot, and MRHB DeFi, AUS and AGS offer a solid foundation for your digital currency investments.
Stay up to date with our gold and
silver news and pricing.
