Gold sinks by most in more than three years as Trump’s win roils markets

Front-month gold futures plunged Monday in their biggest daily decline since June 2021, extending last week’s sharp drop as the U.S. dollar index continues to rise in the wake of Donald Trump’s victory in the presidential election.

The dollar index added another 0.5% to 105.44 Monday to hit its highest level since early July, after surging more than 1.5% last week following Trump’s triumph, as analysts say the new president’s expansive policy plans have strengthened the greenback, drawing investors away from the traditional safe haven of precious metals.

“The likelihood of tariffs being imposed relatively early on into Trump’s presidency and the resulting strong demand for dollar that is creating” is sparking gains in the dollar, according to TD Securities strategist Daniel Ghali, which is “weighing on gold prices for the first time in months because it’s also associated with increasing odds that the Federal Reserve might delay its easing cycle.”

Perhaps adding some clarity for investors, Fed officials, including Chair Jerome Powell, are scheduled to speak this week, while U.S. consumer and producer price index data, as well as weekly jobless claims, also are due this week.

Front-month Comex gold (XAUUSD:CUR) for November delivery ended -2.8% to $2,611.20/oz, its largest one-day dollar and percentage decline since June 17, 2021, while front-month November silver (XAGUSD:CUR) closed -2.6% to $30.540/oz; both metals posted their lowest settlement values since October 9.

During the past two sessions, gold has lost 3.2% and silver has slumped 3.8%.

ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (RING), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)

The biggest gold-backed ETF – the SPDR Gold Trust (GLD) – recorded its biggest weekly outflow in more than two years last week, as Trump’s clear victory surprised investors, prompting a burst of profit-taking.

The ETF saw an outflow that topped $1B, the largest weekly fund outflow since July 2022, as total gold ETF holdings fell 0.4%, the second straight weekly decline, according to data compiled by Bloomberg.

J.P. Morgan commodities analysts said gold’s big move lower ran counter to their expectations, but they believe the selloff is “a stumble, not a sea change.”