Gold (XAU/USD) has fallen nearly 7.0% this November, influenced by the political shift in the US after Donald Trump’s election. The precious metal dropped to the $2,560s as the Republican Party gained control of Congress, boosting the US Dollar (USD) and negatively impacting gold.
Interest rate expectations are also affecting gold, with the Federal Reserve likely to cut rates by 25 basis points in December, which could support gold prices.
Gold ETFs saw significant outflows, with $809 million (12 tonnes) withdrawn in early November, mainly from North America. Hedge funds are exiting long positions, and competition from Bitcoin (BTC) and rising US stocks are diverting investments away from gold.
In China, gold demand is decreasing amid economic slowdown and trade tensions with the US. Geopolitical risks may reduce if Trump de-escalates global conflicts, though tensions in the Middle East and Trump’s appointment of Mike Huckabee as Ambassador to Israel could drive safe-haven flows to gold.
Technical Analysis: XAU/USD Downtrend
Gold has broken a major trendline, indicating a short to medium-term downtrend. It has reached support around $2,540 and the 100-day Simple Moving Average (SMA). A break below this level could target $2,477. Despite the downtrend, gold remains in a long-term uptrend, suggesting potential for a reversal.
