Post-Election Challenges for Gold and Silver

Precious metals recently faced turbulence after Donald Trump's victory. Despite the post-election reset in prices, the long-term outlook for these commodities remains promising. Let's explore their current status and potential future trajectory.

Gold's Glimmer Momentarily Dims

This year saw gold prices surge, but the post-election period has brought challenges. Since Trump's triumphant return to the White House, gold has dropped over 6.5%, juxtaposed with the U.S. stock market's 1.5% rise despite growing concerns about fewer Federal Reserve rate cuts. This dip positions the yellow metal at $2,572 per ounce, a significant decline from last month's peak of around $2,800. However, many analysts still see potential in gold, especially considering policy shifts that could increase U.S. debt and inflation, typically favorable conditions for gold prices.

Silver's Setback

Like gold, silver experienced a notable price drop amidst the election results, falling well below its critical $32-33 range. This decline partly results from the U.S. dollar's strengthening against other major currencies. The stronger greenback, influenced by anticipated tariff changes, can make gold and silver more expensive for international buyers, contributing to subdued demand.

Gold and Silver ETF performance

Gold ETFs lost 3.05% last week, bringing their year-to-date average performance to +29.01%, while Silver ETFs decreased by 1.36%, resulting in a year-to-date gain of 32.41%. Among those ETFs, the iShares Gold Producers UCITS ETF (IAUP) and the VanEck Gold Miners UCITS ETF (GDX) were the largest losers, with declines of 7.79% and 7.68%, respectively.

Here's a comparison between Precious Metals ETFs

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Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.