On Thursday, gold prices fell for the fifth consecutive trading day, dropping below the $2,550 mark to a two-month low, as the surge in the usd put pressure on gold prices, despite us inflation data supporting the possibility of a fed interest rate cut next month.

Since Trump's victory, gold prices have fallen on six out of the seven trading days, as people expect that his win will boost economic growth and corporate profits.

Currently, gold prices have fallen more than 8% from the historical high on October 31, with the decline accelerating following Trump's presidential election win. Supported by the fed's monetary easing cycle, central bank purchases, and increased demand for safe-haven assets due to geopolitical and economic risks, gold prices are still up about 25% this year.

Citigroup's global csi commodity equity index research head Maximilian Layton stated, "The bull market in gold and silver has paused, which may last for a few weeks."

He explained in detail that as the us stock market rises on prospects of lower taxes and regulations, gold prices may decline. After Trump's return to the White House, the us stock market reached an all-time high, but the upward momentum has paused.

Conversely, the usd has climbed to a one-year high, making gold, priced in usd, expensive for holders of other currencies. Vivek Dhar from the Commonwealth Bank of Australia wrote in a report on Wednesday, "The rise of the usd reflects how the market is digesting Trump's inflation policy agenda, which predominantly includes tax cuts and tariffs."

Nicky Shiels, head of metal strategy at MKS Pamp, stated that US stocks are currently in an "optimistic range" as the market digests favorable election results. She said, "Before the honeymoon period of the Trump trade ends, gold and silver will be repriced into a less bullish trajectory."

The October US CPI data released on Wednesday showed an overall decline, in line with expectations, although the year-on-year core CPI for three months increased. Overall, this data supports the possibility that the Federal Reserve may cut rates in mid-December, with swap traders expecting this probability to be over 80%. Lower borrowing costs often benefit non-interest-paying gold.

However, despite the decline in gold prices, market observers remain optimistic about the fundamentals of gold.

Layton stated that the fundamental drivers of the gold market still exist. After Trump won the election, speculation about his tariff proposals and their potential impact on the global economy has increased. "In this case, people will buy gold and silver to hedge against these downside risks."

Furthermore, according to financial services company Canaccord Genuity, central bank demand for gold is likely to remain strong, even if it does not grow, due to the US fiscal outlook and heightened geopolitical tensions. Central banks bought a record amount of gold in the first half of 2024.

The bank's analysts wrote in a report, "If President-elect Trump's second term is confrontational towards friends and foes as his first term was, we believe the strong international demand for gold as a reserve asset may continue against the backdrop of demand for US Treasuries."

Canaccord Genuity stated that factors such as rising debt, geopolitical tensions, and central bank demand are expected to support higher gold prices.