Gold prices settle below $2,700 as dollar continues post-election rise

Investing.com– Gold prices declined on Friday, pressured by the dollar, though expectations for further rate cuts helped keep downside momentum in check. 

Spot gold settled 0.8% to $2,684.20 an ounce, while gold futures expiring in December fell 0.5% to $2,691.90 an ounce by 11:59.ET (16.59 GMT). 

The yellow metal was battered by a sharp rally in the dollar this week after Trump won the 2024 presidential election. But the dollar retreated from four-month peaks on Thursday after the Fed cut interest rates and signaled plans for more easing.

Gold heads for weekly loss after post-Trump drubbing 

Spot gold was set to lose nearly 2% this week, having fallen sharply after Trump’s victory.

The decline was in part spurred by a rally in the dollar and Treasury yields, as markets bet that Trump would introduce more inflationary policies in the long term.

But Trump’s victory also marked a swift end to the U.S. elections, clearing out a major point of uncertainty for markets and sparking a rally across risk-driven assets. Gold had surged to record highs in the run-up to the election, with spot prices coming close to $2,800 an ounce. 

Fed rate cut offers gold some relief 

The yellow metal saw some relief on Thursday after the Fed cut interest rates by 25 basis points as expected.

Chair Jerome Powell indicated that the U.S. economy remained resilient, and that the Fed will ease monetary policy further, albeit cautiously. 

Such a scenario presents some near-term relief for gold and other non-yielding assets. But markets now turned uncertain over the longer-term outlook for rates, especially in the face of a Trump presidency. 

Other precious metals fell on Friday and were also nursing weekly losses. Platinum futures fell 2.1% to $978.40 an ounce, while silver futures fell 1.4% to $31.420 an ounce. 

Copper dips, China NPC in focus 

Among industrial metals, copper prices retreated on Friday, but were set for some gains this week, as traders looked to more cues on fiscal stimulus from top importer China. 

Benchmark copper futures on the London Metal Exchange fell 2.5% to $9,441.00 a ton, while December copper futures fell 2.7% to $4.3110 a pound. 

China’s National People’s Congress is set to outline plans for more fiscal spending at the conclusion of a four-day meeting on Friday. Measures are expected to aimed largely at shoring up economic growth, as the country grapples with persistent deflation and a property market slowdown.

(Ambar Warrick contributed to this article.)