The gold price continued its post-US election correction this week, sinking to nearly US$2,540 per ounce.
Although it recovered to end the period at around US$2,560, the yellow metal hasn’t been at these levels for about two months. Market watchers see US dollar strength and higher bond yields weighing on its performance.
The US Dollar Index has moved higher since Donald Trump’s victory in the American election, supported by expectations that the president-elect will follow through on enacting tariffs and tightening immigration — these are policies that could boost inflation and in doing so potentially slow the US Federal Reserve’s interest rate cuts.
While gold tends to fare better when rates are low, the opposite is true for the dollar.
Yields for the 10 Year Treasury have moved higher since voting day too, although they’ve seen some bumpiness.
It’s also worth noting that the latest US consumer price index (CPI) data came out on Wednesday (November 13). CPI rose 0.2 percent month-on-month and was up 2.6 percent year-on-year. Meanwhile, core CPI, which excludes the more volatile food and energy categories, was up 0.3 percent from September and 3.3 percent from a year ago.
The numbers were in line with forecasts across the board, bolstering expectations that the Fed will reduce rates by another 25 basis points at its December meeting. However, those expectations took a hit on Thursday (November 14), when Fed Chair Jerome Powell said that the economy isn’t sending signals that rates need to come down quickly.
“The economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully,” he commented.
What’s next for the gold price in this environment? The Investing News Network will be attending the New Orleans Investment Conference next week, and we’ll be asking experts like Rick Rule, David Morgan, Lobo Tiggre and more for their thoughts. Please send an email to cmcleod@investingnews.com to let us know what questions you’d like answered.
Bullet briefing — Citigroup cuts copper forecast, Friedland plans iron ore IPO
Citigroup cuts copper forecast
Citigroup (NYSE:C) is cutting its short-term copper price forecast by 11 percent in the wake of the US election.
“Former President Donald Trump’s election for a second term marks a clear turning point in global trade tariff policy. And China’s lack of easing to date has surprised us,” the firm said this week in a note.
Citigroup is expecting prices to drop to US$8,500 per metric ton over the next three months, down from its previous call of US$9,500. Citigroup also sees China’s weaker-than-expected stimulus measures weighing on the metal.
Although the Asian nation recently announced a debt relief package worth US$1.4 trillion, members of the copper industry don’t see it having much impact on demand.
“The latest stimulus is to refinance local government debts, so that’s not going to boost physical (copper) demand much” — Ni Hongyan, Eagle Metal International
Friedland plans ASX iron ore listing
Robert Friedland reportedly plans to list iron ore company Ivanhoe Atlantic on the ASX before June 2025.
Formerly known as High Powered Exploration, Ivanhoe Atlantic’s main asset is the Nimba iron ore project in Guinea. However, funds raised by the company will also be used to make acquisitions in the critical minerals sector.
Friedland is currently best known for Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF), whose operations include the Kamoa-Kakula copper complex in the Democratic Republic of Congo, but he is also involved in various other companies and projects.
Want more YouTube content? Check out our expert market commentary playlist, which features interviews with key figures in the resource space. If there’s someone you’d like to see us interview, please send an email to cmcleod@investingnews.com.
And don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
From Your Site Articles
Related Articles Around the Web
