Gold Market Volatile To End Worst Month Since 2023

 

Gold Strikes a Volatile Note To End Its Worst Month Since 2023

(Bullion News Network) – Gold is set to end in the green today to conclude the worst month for the precious metal in over a year. The spot price of gold dropped by over 3% since November 1st, its largest monthly loss since September of 2023. Gold will trade in the green this morning; the precious metal gained over $14 since market open and added to a series of small gains that began on Tuesday. Monday saw gold drop nearly $90/oz, one of the biggest daily losses in months for the yellowish precious metal. The rest of the week was a bit better for gold bulls, although the metal is set to finish the week about $70 lower than its Friday spot price. 

November was the worst month in over one year for the gold market. The election of President-Elect Donald Trump on November 5th led to a run for the United States dollar and record stock market performances as traders geared up for a new leader whose policies are expected to increase the strength of American currency and dismantle business regulations. Gold moved opposite to traditional markets for much of the month, dropping consistently and hitting a month-to-date low of $2,562.10/oz on November 15th. 

Gold prices set for biggest monthly decline in over one year https://t.co/8RTtkFCYz6 pic.twitter.com/hA4vCdztUn

— Reuters U.S. News (@ReutersUS) November 29, 2024

Geopolitical uncertainty provided a small counterweight as the “Trump euphoria” pushed investors away from safe haven assets and toward interest-yielding stocks and bonds. Last week saw gold reclaim the $2,700/oz level after President Joe Biden gave his approval for Ukraine to use U.S. weapons to conduct longer-range strikes in Russia. Russian officials responded by calling the move an overt escalation and using, for potentially the first time in an actual conflict, intermediate-range ballistic missiles (IRBMs) to strike Ukrainian military targets. 

The counterbalancing effect of geopolitical uncertainty in the gold market took a hit earlier this week when Israel officially secured a ceasefire with Lebanon. In September and early November, escalations in tensions between the two countries drove demand for gold, an asset that traditionally performs well during periods of conflict and war. Gold dropped on the ceasefire news, which was announced earlier this week. 

Interest rate speculation has also played a significant role in gold’s price action throughout 2024. The Federal Reserve’s ‘jumbo’ 50 bps rate cut in September drove gold to an all-time high, and rumors of interest rate movements have very closely mirrored gold price movements in Q3 and Q4 of this year. The trend continued this month; gold dropped after Federal Reserve Chair Jerome Powell expressed that the Fed does not need to be “in a hurry” to cut interest rates. As of now, CME Group’s FedWatch tool anticipates a 66% chance that the FOMC will move to cut interest rates by 25 basis points and a 34% probability that the federal interest rate remains the same. 

Gold will end the day up but the week down by about $65 per troy ounce. Heading into December, traders can expect more volatility out of the precious metals as investors attempt to balance interest rate odds, geopolitical uncertainty, and economic policy changes set to begin with Donald Trump’s inauguration in January.