Gold Prices Decline After US Election Results: Is It a Trend Change or Temporary Correction?

Following the announcement of the US presidential election results, the price of gold, which had set multiple records earlier in 2024, began to decline. This raises the question: is this a sign of a trend change or merely a temporary correction in the market?

Historically, gold has been regarded as a safe financial investment. Known for its reliability and steady growth in value, it has long been seen as a safe haven during times of economic uncertainty. However, as global financial markets evolved and investors increasingly turned to diverse financial instruments, gold’s role as the dominant investment began to decline.

Over the past two decades, during which the world has faced multiple financial crises, gold has once again proven to be one of the safest assets, offering consistent returns to investors. In the early 2000s, the price of gold per troy ounce was around $400, and by the time the 2008 financial crisis hit, it had risen to approximately $1,000. In 2011, the price peaked just below $2,000.

In 2024, gold experienced a significant surge, reaching record highs. By October 2024, the price of gold nearly exceeded $2,700 per ounce. This surge was driven by several global factors, including rising economic and political uncertainties, instability in the Middle East, and speculation about the outcome of the US presidential election. Furthermore, the US Federal Reserve’s decision to lower its benchmark interest rate in September 2024, followed by another reduction in November, led to a drop in US sovereign bond yields, contributing to the surge in gold prices.

Global demand for gold also surged in the third quarter of 2024, increasing by about 5%, setting a new record and pushing total gold consumption above $100 billion for the first time.

However, as is often the case with rapid price growth, gold’s price has recently experienced a decline. After the US election results were announced, the price of gold fell to around $2,600 per ounce.

While this price correction may raise concerns, experts caution that it is too early to predict whether this marks the beginning of a downward trend. Gold is still widely regarded as a valuable asset for protecting capital, and its price volatility is not unusual in times of economic adjustment.

As the global financial landscape continues to evolve, gold’s role as a safe-haven investment remains intact, and it is likely to remain an attractive option for investors looking to hedge against future uncertainties.