Gold and Copper Prices Drop as Trump’s Return Strengthens Dollar

Since October, market trends have reflected the impact of “Trump deals,” influencing various sectors. The US dollar has strengthened, while gold prices have risen, and oil and copper have experienced declines. These fluctuations suggest the possibility of a market reversal in the short term.​

Gold’s appeal as a hedge against economic instability, especially in a low-interest-rate environment, has led to its increasing popularity. The precious metal recently hit a record high of $2,769.25 per ounce on October 29, marking a 35% rise for the year. However, a slight dip on Wednesday saw it fall by 3.1%, closing at $2,659.24 per ounce.

UBS analysts have predicted that gold could reach $2,900 per ounce by the end of the third quarter of next year, with a Trump victory likely accelerating this upward momentum. His policies on tariffs, government spending, taxes, and interest rates are expected to continue influencing gold’s price.

Goldman Sachs analysts, too, see prices rising, forecasting a target of $3,000 per ounce by the end of 2024. This surge is partly attributed to the US Federal Reserve’s monetary policies, including its quantitative easing program and massive balance sheet expansion, which have contributed to a weakening global confidence in the US dollar.

Many central banks worldwide are responding to these shifts by diversifying away from the dollar, turning toward gold and virtual currencies as alternatives. This ongoing trend is expected to drive further demand for gold in the long term.

Additionally, Trump’s tariff policies are affecting global trade, particularly with China, where the yuan has already shown signs of depreciation. As a result, gold has become increasingly attractive to Chinese investors seeking protection against currency fluctuations. In the first three quarters of this year, China’s gold consumption dropped 11%, with jewelry purchases declining by 27.53%. However, sales of gold bars and coins saw a 27.14% increase, as investors turn to physical assets to safeguard wealth.

​​As these economic dynamics continue to evolve, individuals and investors alike are paying close attention to the potential for gold to serve as a buffer against the growing uncertainties surrounding global trade and the US dollar’s future.