Gold headed below $2,600 for the first time since mid-September as the strengthening US dollar hit a six-month high.
At 9.30 am, the price of gold was at $2,607.86 which is a 0.36% recovery since it opened in early trading on Wednesday in the Asian session.
For now, investor sentiment is digesting Donald Trump's victory with an eye toward mandates on tax-cutting policies, international tariffs and the fight against illegal immigration.
On Tuesday, the new appointments of Mike Waltz as National Security Adviser and Marco Rubio as the new Secretary of State sparked new speculation that US action in imposing giant tariffs on China is imminent.
Meanwhile, the market predicts the Fed will be less dovish by raising the terminal to around 3.99% based on the Chicago Board of Trade (CBOT) report.
CME FedWatch shows that the likelihood of a quarter percentage point interest rate cut at the December 2024 meeting has been lowered from 65% to 58% and continues to decline.
According to the November 2024 World Gold Council (WGC) commentary, the traditional metal did not generate accumulated losses due to outflows from Gold ETFs.
He also said that political risk makes the price of gold prone to fall when investors' appetite shifts to the US dollar and the strengthening of US bond yields may also affect the prospect of Bullion.
