Wall Street experts and individual investors all believe that gold prices will continue to decline after Donald Trump was elected president.
Last week’s financial markets were influenced by the US presidential election and precious metals were no exception. After hitting $2,700 per ounce, the sell-off when Mr. Trump was elected caused gold to close the week at $2,684 per ounce.
Survey of Kitco News said that out of 14 analysts interviewed, 9 (64%) predicted that gold prices would continue to go down next week. Only 3 experts (21%) expect prices to increase and 2 experts (14%) keep a neutral view.
The optimism of individual investors over the past few weeks also wavered. Less than half of respondents forecast positive prices. The percentage of price forecasts to decrease and move sideways accounts for 36% and 18%, respectively.
Gold price forecast for the week of November 11-15. Source: Kitco
Adrian Day, Chairman of Adrian Day Asset Management, said that it is not unusual for gold to continue to decline, as some investors take profits while demand from China’s central bank and consumers declines.
“Remember that gold reacted similarly to the election of Donald Trump in 2016, when there was optimism about economic growth, a strong dollar and rising stock markets. That correction lasted about six weeks.” , he said.
Frank Sohleder, analyst at ActivTrades also said that precious metals are likely to fall further in the short term. “Despite the increase, gold still cannot escape the risk of a major correction,” he said. This expert believes that even the US Federal Reserve (Fed) lowering interest rates cannot ensure demand for gold.
Senior market strategist at Forex James Stanley is in the optimistic minority. According to him, the price of gold after the election looks unstable, fluctuating around 2,650-2,700 USD an ounce. “Normally with this development, I lean towards the bearish trend, but considering the strength of gold this year, I am not ready to reverse the forecast so I still maintain a bullish view,” he said.
After many major events, gold price movements next week may be influenced by information about the consumer price index (CPI) and retail sales in October. These data provide a clearer view of the market. spending capacity of the American people.
Fed Chairman Jerome Powell will give a speech on November 14, giving him an opportunity to clarify his comments during the press conference about the upcoming administration and central bank independence.
Adam Button, Head of Currency Strategy at Forexlive, said it is necessary to closely monitor signals about who will become the next Finance Minister. Two terms ago, Mr. Trump appointed Mr. Mnuchin on November 29 and Mr. Biden chose Ms. Yellen on November 23.