New Delhi, November 13 – Gold’s strong rally throughout the year has hit a temporary pause following the recent U.S. election results, according to a report by the World Gold Council. A mix of rising bond yields, a strengthening U.S. dollar, and renewed investor interest in stocks and cryptocurrencies has cooled gold’s momentum.
The election outcome appears to have eased some geopolitical tensions, reducing gold’s immediate appeal as a safe-haven asset. Prior to the election, there was speculation that U.S. Treasury yields and the dollar had peaked, with expectations for a weaker dollar and potentially lower yields. However, the election results prompted a quick reversal, sending the dollar higher as the euro and yen dropped sharply. Bond yields also surged, driven by expectations that inflationary policies from the Trump administration—such as tariffs, tax cuts, and infrastructure spending—could increase government debt and stimulate inflation.
The rise in bond yields reflects investor demand for higher returns on U.S. Treasuries. Meanwhile, the election outcome has also boosted interest in cryptocurrencies, as the new administration signals openness to pro-crypto policies. Stock markets, particularly in tech, have also benefited from anticipated business-friendly measures.
Despite these pressures, gold still has fundamental support. Asian demand remains strong, particularly in China, where a decline in the CSI300 index and inflationary pressures from U.S. fiscal policies could continue to support gold. Additionally, the ongoing fiscal policies in the U.S. may add inflationary pressure, further strengthening the case for holding gold.
Looking ahead, while the election results and rising bond yields pose short-term challenges, gold’s long-term resilience is backed by factors such as rising protectionism, high equity valuations, and limited appeal of cryptocurrencies as a full replacement for gold. Although gold has paused, it is likely to remain a key asset amid ongoing inflation concerns, global conflicts, and concentrated stock markets.
