Investing.com — Gold prices fell in Asian trading on Friday, as markets digested the effects of Donald Trump's second term as president, even as the dollar weakened following a Federal Reserve interest rate cut. Despite this, I felt little sense of security.
The yellow metal took a hit this week as the dollar soared following Trump's victory in the 2024 presidential election. However, the dollar fell from a four-month high on Thursday after the Federal Reserve cut interest rates and signaled plans for further easing.
It fell 0.4% to $2,695.93 an ounce by 11:38 pm ET (04:38 GMT) and 0.1% to $2,702.80 an ounce by December deadline.
Gold falls weekly after Trump administration collapses
Spot gold fell sharply following Trump's victory and was expected to drop about 1.6% this week.
The decline was spurred in part by rising Treasury yields, with markets betting that Mr. Trump will introduce more inflationary policies in the long run.
However, Trump's victory marked an early end to the US election, removing significant uncertainty for the market and triggering a rise in risk-driven assets overall. Leading up to the election, gold soared to record highs, with spot prices approaching $2,800 an ounce.
Fed rate cuts provide some relief for gold
As expected, there was some relief in the yellow metal on Thursday following the Fed's announcement.
Chairman Jerome Powell said the U.S. economy remains resilient and that the Fed will cautiously ease monetary policy further.
Such a scenario would provide short-term relief for gold and other non-yielding assets. However, the market is currently experiencing heightened uncertainty over the long-term outlook for interest rates, especially in the run-up to President Trump's inauguration.
Other precious metals also fell on Friday, ending the week lower. fell 0.6% to $997.85 an ounce and fell 0.1% to $31.823 an ounce.
Copper price plummets, focus on China's NPC
Among industrial metals, copper prices fell on Friday but were set for some gains this week as traders looked for further fiscal stimulus from China, its biggest importer.
The London Metal Exchange benchmark fell 0.7% to $9,614.0 a tonne, and December fell 0.9% to $4.3970 a tonne.
China's National People's Congress is scheduled to outline plans to expand fiscal spending at the end of a four-day meeting on Friday. These measures are expected to be primarily aimed at boosting economic growth as the country grapples with prolonged deflation and a weak real estate market.
