Gold Prices Today: Yellow metal to log worst week in five months after Trump's win weighs on US Fed rate outlook

Gold Prices Today: The yellow metal dropped on Friday, November 8, but was poised to log its steepest weekly decline in over five months. A stronger US dollar pressured gold prices, and the stock market absorbed the implications of Donald Trump's recent victory in the US elections in 2024 and its potential impact on US Federal Reserve interest rate expectations.

Spot gold last fell 0.6 per cent to $2,690.62 and was down 1.6 per cent for the week. US gold futures shed 0.3 per cent to $2,697.90. The US dollar index gained 0.3 per cent and was on track for a weekly gain. Spot silver last fell 1.3 per cent to $31.58 per ounce, platinum last fell 1.8 per cent to $979.15, palladium shed 2.3 per cent to $1,001.25. All three precious metals were heading for weekly declines. Back home, gold futures dropped 0.21 per cent to ₹77,249 per 10 grams on the multi-commodity exchange (MCX).

Also Read: Gold price today: Yellow metal declines after Fed cuts rates by 25 bps; experts share key levels for MCX Gold rate

Gold headed for worst week in one year: What's weighing on the yellow metal?

-The US Federal Reserve slashed the benchmark interest rates by 25 basis points (bps), but indicated a cautious approach to further rate cuts in the near term. Republican Donald Trump's victory has fuelled questions about whether the US Fed may proceed to cut rates at a slower and smaller pace, given the former president's tariff policy. 

-However, US Fed Chair Jerome Powell said the election results would have no "near-term" impact on the monetary policy. The prospect of rate cuts, starting with the half-basis point reduction in September, has underpinned gold's record rally this year. Although bullion is reputed as a hedge against inflation, higher interest rates reduce non-yielding gold's appeal.

-Analysts said if markets restore the odds for a pre-Christmas Fed rate cut, that should help keep spot gold above the psychological $2700 level. On the physical front, gold demand in India faltered, while Japan and Singapore saw some buying.

Also Read: US Fed cuts policy rate by quarter-point to 4.50-4.75% after Donald Trump’s poll victory; 5 key takeaways

Where are gold prices headed?

Analysts said gold traded weak, dropping by ₹300 to ₹77,150 and by $20 to $2,685, amid strength in the dollar index and the US Federal Reserve's policy announcement aligned with expectations of a 0.25 per cent rate cut. The Fed's outlook and inflation trending toward the targeted two per cent offered no new surprises to support gold prices. 

"Profit booking continued following Trump's election victory. Gold is currently facing resistance in the ₹77,250- ₹77,350 range. At the same time, a strong short-term support level is seen at ₹76,500," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

Also Read: US Election Results: FPI outflows to China trade war—how will Trump’s victory impact global markets? Experts weigh in

Gold and silver prices rebounded from one-month lows following interest rate cuts by the US Federal Reserve and the Bank of England. Some analysts also said the Fed reduced rates by 25 basis points, a move mirrored by the Bank of England, which supported bullion prices. The dollar index and US 10-year bond yields eased from four-month highs after the Fed's monetary policy meeting, further boosting gold and silver.

"Gold is expected to find support at $2,674–$2,655, with resistance at $2,718–$2,735. Silver has support levels at $31.64–$31.50 and resistance between $32.22–$32.45. In Indian rupees, gold has support at ₹77,220– ₹76,950, with resistance at ₹77,880– ₹78,160. Silver support lies at ₹91,680– ₹90,850, while resistance is seen between ₹92,840– ₹93,380," Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.