Gold and Silver End Volatile Week in the Red As Traders Eye U.S. Election

 

Gold and Silver End a Volatile Week in the Red As Traders Eye U.S. Election 

(Bullion News Network) – Despite a strong midweek rally that pushed gold to a fresh all-time high and silver above $34.50/oz, both precious metals will end this week in the red. Gold’s biggest losses came on Thursday, when the metal dipped over $40 and settled at around $2,745 per troy ounce. Gold dropped another $5 this morning, ending the week about $5 lower than it began on Monday. Silver peaked earlier in the week, gaining $.80 and challenging the $34.50 level on Tuesday. Consecutive losses on Wednesday and Thursday dragged silver down nearly $2 per troy ounce. Today’s moderate dip places silver at $32.55/oz, over a dollar below Monday’s closing price. 

In summary, this has been a volatile week for precious metals. With a controversial, hotly contested U.S. election concluding in just four days, investors should expect more of the same heading into next week. Vice President Kamala Harris and former President Donald Trump are still neck-and-neck in the final days of the race, with most pollsters predicting toss-ups in several of the key swing states that will likely decide the next President of the United States. 

This is not unprecedented. Market volatility in the days leading up to – and following – an election is relatively common. In fact, economists already anticipate that American markets will be volatile as Americans hit the polls, especially given the stakes and competitiveness of this election. Precious metal markets are especially influenced by U.S. elections. This race, which has centered primarily on economic and foreign policy, is concluding during a period of growing tensions in the Middle East, economic anxiety domestically, and an ongoing war between Russia and Ukraine. This global climate of uncertainty has been a boon for gold and silver in 2024, since both of these safe haven assets tend to thrive in environments of instability and strife. 

Given this unique set of circumstances, analysts expect the outcome of the 2024 election to play a pivotal role in how precious metals perform heading into 2025. Whoever wins the White House will inherit a wide range of domestic and international issues to contend with, and retail investors should anticipate skittish markets until traders place their bets on how the next President will perform in a fast-evolving, tense international climate. 

The Fed Meets Next Thursday – Here’s What Precious Metal Investors Should Expect

The Federal Reserve will meet on November 7th, just two days after Americans hit the polls to vote. After a surprise 50 bps rate cut in September sent gold prices to a fresh all-time high, precious metal traders will pay close attention to the FOMC’s ruling for cues on where gold and silver prices could be heading. CME Group’s FedWatch projects a 96.4% probability that the Fed will opt for a less aggressive 25 point rate cut in November and a 3.6% chance that Powell’s FOMC will keep rates unchanged. 

Adding to volatility in the precious metals market is a new job report released this morning. The United States added only 12,000 jobs in the month of October, a sharp decrease from September’s numbers – and just over 1/10th of the Dow’s forecast of 100,000 new jobs. The data did little to shake American markets; the Dow closed 300 points in the green to begin November as investor optimism apparently rebounded quickly from the troubling employment data. 

Markets remain generally confident that another rate cut is on the way when Powell and the FOMC meet on November 7th. The timing of this rate cut could compound volatility as Americans contend with what will likely be a yet-undecided election. In 2020, challenges to vote tabulation delayed election calls for nearly a week, and a series of legal battles initiated by the GOP spurred quite a bit of movement in precious metal markets as traders fretted over an uncertain economic – and political – future. 

Precious metal prices remain volatile ahead of a contentious U.S. election and a pivotal Federal Reserve meeting, both of which will happen next week.