Gold Is Suddenly Not So Glittery After Trump's White House Victory

Washington: After ripping higher for much of this year, price of gold has suddenly become not so golden since Donald Trump 's victory in presidential election.

Gold fell more than 4% in four days since Election Day, when bro U.S. stock market climbed nearly 4%. That's even though investors are expecting a Trump White House to drive tax rates lower and tariffs higher. Such a combination could push U.S. government's debt and inflation higher, which are both things that can help gold's price.

That's left gold at $2,618 per ounce, as of late Monday, down from a record of roughly $2,800 set late last month. It also means gold has lost some luster as best performing investments of year. largest exchange-tred fund that tracks price of gold has seen its gain for 2024 drop back below 27% from nearly 35% a couple weeks earlier.

What's going on? Part of decline has coincided with strengning of U.S. dollar against or major currencies. Tariffs and tre wars instigated by United States could push down value of euro and or countries' currencies, and a strong U.S. dollar makes it more expensive for buyers using those or currencies to purchase gold.

Trump's preference for lower taxes and higher tariffs is also forcing Wall Street to ratchet back expectations for how many cuts to interest rates Federal Reserve will deliver next year. Fewer rate cuts would mean Treasury bonds pay more in interest than previously expected, and that in turn could hurt gold's price. Gold, which pays its owners zero dividends or income, can look less attractive when bonds are paying more.

Gold, of course, still has its reputation for offering a safer place for investors when things are shaky around world. Wher it's been because of wars or political strife, investors often flock to gold when y're not feeling confident about or investments. And with wars still raging in Middle East, Ukraine and elsewhere, while political tensions still seem as high as ever, gold will likely stay in many investors' portfolios.

“Gold continues to be safe haven asset class of choice for both investors and central banks,” according to money managers at Robeco, which handles investments for big institutional investors.

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