As of November 21, 2024, gold prices have seen a significant decline, falling over 8% from their all-time high of $2,802 reached in late October. This downturn began shortly after the U.S. election results on November 15, which reduced political uncertainty and led to a stronger U.S. dollar, now near two-year highs, negatively impacting gold's appeal [43dfc142]. Currently, gold is trading around $2,600 per ounce, down nearly 7% since Election Day [7a38f96a]. Nicky Shiels, Head of Research & Metals Strategy at MKS PAMP, anticipates that gold could drop further to $2,500 as the initial excitement surrounding the election fades [9936ea13].
In contrast, Bitcoin has surged alongside stock markets, with the iShares Bitcoin Trust ETF surpassing $40 billion in assets. Bitcoin is currently trading above $83,000, reflecting a growing preference for cryptocurrencies over traditional safe-haven assets like gold [43dfc142]. Analysts have noted that gold's performance following Trump's victory has been the weakest in 13 election cycles, according to Deutsche Bank, with prices dropping about $230 since the record high [43dfc142].
Goldman Sachs analysts have urged investors to consider gold as a hedge against potential inflation risks stemming from Trump's policies, which may lead to increased tariffs and consumer prices [fbd31a04]. They project that gold prices could rise to $3,150 per ounce by the end of 2025, driven by inflation concerns and geopolitical risks [fbd31a04]. However, the recent market dynamics suggest that gold is currently less appealing as equities perform well, as noted by Rob Haworth from U.S. Bank [7a38f96a].
Despite the short-term declines, the long-term outlook for gold remains positive, with expectations that central banks will continue to buy gold as a reserve asset. Matt Miskin from John Hancock Investment Management characterizes gold as a contrarian investment, suggesting that the recent sell-off may present a buying opportunity for long-term investors [7a38f96a].
As the economic landscape evolves, the interplay between currency strength, inflation fears, and demand for gold as a safe-haven asset will be closely monitored. The contrasting trends of Bitcoin and gold highlight a shift in investor sentiment, with cryptocurrencies gaining traction in the current market environment [43dfc142].