Gold Market Faces Pressure Following Strong US Dollar and Election Results

According to the World Gold Council’s Gold Return Attribution Model (GRAM), the decline was largely attributed to the strengthening of the US dollar, outflows from gold ETFs, and a decrease in net managed money-long positions on COMEX. This trend reflects a likely unwinding of pre-election hedges.

Global gold ETFs saw an estimated $809 million (12 tonnes) in outflows during this period, with most of the losses occurring in North America, although Asian markets helped offset the losses somewhat. The dollar's strength and rising bond yields also created higher opportunity costs for investors in gold.

Looking ahead, the market faces further challenges as the impact of the US election results begins to unfold. Stronger bond yields, a stronger dollar, and risk-on sentiment in equity markets could result in a near-term retracement in gold prices. Despite these pressures, the World Gold Council remains optimistic about gold's long-term prospects, citing continued demand from Asian investors and central banks.