Simple Gold Analysis for Today

Gold prices fell on Friday, heading for a second straight weekly decline, as traders assessed the impact of Donald Trump’s presidency on U.S. interest rates.

The U.S. dollar index is poised to post slight gains for the week after Trump’s victory. A stronger dollar makes the precious metal more expensive for overseas buyers.

The Federal Reserve cut interest rates by 25 basis points on Thursday, as expected, but signaled a cautious and measured approach to any further cuts. Fed Chairman Jerome Powell said the results of the presidential election would have no “near-term” impact on monetary policy.

Traders now see a 71% chance of another 25 basis point cut in December.

Gold is considered a hedge against inflation, but higher interest rates increase the opportunity cost of holding the metal.

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