Source: Jin10 Data
Author: Xiao Yanyan

Trump's victory prompted traders to take profits, with the largest global gold ETF, SPDR Gold Trust, experiencing an outflow of over $1 billion last week, the largest single-week outflow since July 2022. Spot gold fell by 1.9% during the same period. The total holdings of the gold ETF declined by 0.4%, marking the second consecutive weekly decrease.

Last month, due to the high degree of uncertainty surrounding the US presidential election, investors rushed in.Its price has soared to a historic high, closely related to market expectations of interest rate cuts by the Federal Reserve.However, with Trump winning key battleground states and the Republican party controlling the Senate, investors exited their positions to lock in profits.

Trump's victory also boosted US stocks and the dollar, reducing the attractiveness of gold to investors holding other currencies. Gold traders continued to take profits on Monday, causing the price of gold to drop to a one-month low, leading to a sharp decline in gold mining stocks.

Trump's love for what he describes as the "most beautiful word in the dictionary" (tariffs) is expected to raise commodity prices and inflation rates. Although this is not beneficial for the US dollar itself, it will slow down the pace of interest rate cuts by the Fed. Relatively higher interest rates will attract more foreign capital inflows, which in turn will be bullish for the US dollar. Trump likes to reduce domestic taxes in the US, which could further stimulate inflation, exacerbating the impact of inflation.

According to the UK's Financial Times, Trump has invited trade protectionist Robert Lighthizer to serve as US Trade Representative, a well-known protectionist hardliner, which may further pressure gold. Lighthizer served in the same position during Trump's presidency from 2016 to 2020 and is famous for advocating a tough stance on trade protectionism. Last Friday, the Financial Times of the UK first reported his appointment, although a Reuters article later refuted it, stating that one of their sources called the news "untrue," but the rumor continues to circulate.

Daniel Ghali, the commodity strategist at TD Securities, said, "Since the red wave, the market's attention has shifted to second-order effects. It is very likely that after Trump took office as president, tariffs were imposed early, creating strong demand for the dollar as a result. The recent strength of the dollar for the first time in months has dragged down the price of gold, as this is also related to the increased possibility of the Fed delaying the easing cycle."

Currently, traders believe there is a 65% chance that the Fed will cut interest rates by 25 basis points in December, compared to about 80% before Trump's election victory.

Gold is currently in a short-term downtrend, with analysts at FXStreet believing that, based on the principle that "the trend is your friend," the downtrend is likely to continue.Technical analysisSpot gold has fallen below the November 7th low of $2643, confirming the continuation of the downtrend, with the next target possibly the trendline of the long-term uptrend at $2605.

Relative Strength Index（RSI）, gold price is not oversold, so there may be more downside. In the medium to long term, gold is still in an upward trend, at some point, the price may reverse and rise with these broader upward cycles.

Editor/Jeffy